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Politics : American Presidential Politics and foreign affairs -- Ignore unavailable to you. Want to Upgrade?

To: DuckTapeSunroof who wrote (44186)	7/15/2010 1:13:52 PM
From: TimF	Read Replies (1) \| Respond to of 71588

I have no idea how in Hell you could think that I've already explained it twice. The "structural deficits", where not a very meaningful point. Structural deficits are deficits based on current government policy, and policy can be changed. Clinton was well situated to change those policies, since he had the "peace dividend", and had all the new military equipment bought during the Reagan (and to a lesser extent the Bush) administration. The first allowed him to cut the size of the military, the later allowed him to have lower procurement costs that would normally be expected even for the smaller sized military. And presidents are not the only politicians who's policies have an effect on deficits. Usually congress pushes a lot of spending, but Clinton had the reverse (a congress that would have controlled spending even better than it was actually controlled had Clinton not defeated them in the "shut down the government" battle). And the cyclical situation for Clinton was the best of any modern president. That last factor alone is larger than the structural deficit issue was during his term, the combination of the three is much larger. And yes the tax increase also lowered the deficit (although not as much as static analysis would suggest), but that also to an extent involves Clinton being set up perfectly. He had a situation with lower marginal tax rates than we have now, or than Regan faced, so he could increase them without causing as much harm. He also had an economy coming in to a strong recovery from the recession that ended shortly before he was elected, and a stock bubble, all of which moved the economy forward to a greater extent than his tax increases pulled it back. If Reagan or Bush II had similarly increased tax rates the harm to the economy would likely have been noticeably larger and would not have been counteracted by the favorable conditions Clinton faced. If Obama increases taxes (or if you prefer allows the scheduled tax increases to go through as planned), he is also unlikely to face conditions favorable enough to swamp the harm caused by the higher taxes. Its not even a close run thing, Clinton didn't just enjoy the best conditions to improve the fiscal situation of any recent president, he enjoyed the best conditions by far.