Achieve growth and fiscal sanity. Restore Clintonomics.
All around the country, Republican candidates are running on the platform of cutting taxes. One often repeated claim is that cutting taxes has always created prosperity. That is the biggest lie.
The last time the taxes were cut was under Bush. The Bush tax cuts for highest incomes did not create prosperity. Economy struggled all through the Bush administration and in his last year went into freefall. So whenever one sees Republican candidates repeating the claim that tax cuts have always created prosperity, one needs only to remind himself of what happened under the Bush administration and see these Republican candidates to be liars.
When Clinton slightly raised higher income taxes, the result was not only a balanced budget but also a vast prosperity. There is a simple reason for this. Clinton convinced investors that the debt was being brought under control, and that it was safe to do business in America. The result was a vast influx of investment capital creating both prosperity and jobs. By reducing the deficit, he also freed capital that was tied up in government bonds for investment in productive sectors of the economy. The result of Clintonomics was the greatest period of peace and prosperity that America has ever known.
The Bush tax cuts blew a hole in the budget and again tied up investment capital in government bonds. The result was vast accumulation of debt, a sluggish economy, and finally a full-scale financial collapse. Obama administration has not tackled the problem effectively. But to know what it takes to achieve economical and fiscal sanity one needs only look at times that had economic and fiscal sanity. And the only such time in recent memory was the Clinton administration.
For the Republican cut-the-taxes crowd, it suits to remind that in 1950s - the time to which many of the Republicans want to return America - the highest income bracket tax was 92%. It was 39% under Clinton; it is 36% now. Nobody in politics, not Democrats, not Republicans, not the Greens, not the Tea Party, are dreaming of bringing the taxes back up to 92%. So if one hears a Republican talk about how great things were in 1950s, he should simply be asked, Are you willing to pay a 92% income tax that existed in 1950s? And if you are not, then could you please shut up?
The problem with present economy is not that the taxes are too high; it is that the taxes are too low and inadequate for accounting for the budget needs. With baby boomers retiring, there is going to be a vast run on Medicare and Social Security. The vast deficits we have seen in most recent years are a result of a triple-punch combination of this, the continuation of rresponsible Bush tax policies, and the spending outlays that were done by the Obama administration to keep the economy from going into a complete tailspin. And the solution is restoring the fiscal sanity that existed the last time that America had fiscal sanity, and the last time that America had a booming economy - the successful policies of the Clinton administration.
At the beginning of his administration, Obama said that he would rather do the hard things and be a great president than do the popular things and be a mediocre president. The time to do the hard things is now. It must be explained to the people why Clintonomics worked and what America stands to gain from bringing back the Clinton economic policies. And the Republican lie that tax cuts are always good must be put to rest once and for all.