Demunists Hanker for the Glorious Clintonian Past

Steny Hoyer was just interviewed on CNBC and I just love to hear the nonsense that spills out of Demunist leaderships mouths whenever they open.  Speaking about the state of employment and the Democratic shift to prioritizing jobs in an election year, he went on about how if we could just get the policy mix we had in the Clinton years back in place we could counter all the damage done in the Bush years.  Obviously he is referring to marginal tax rates and Demunist’s desire to fleece everyone who has anything to fleece of whatever is fleeceable.  It really makes one wonder whether there is a brain or a Democratically preprogrammed computer in his head.

To anyone who remembers the golden 90’s, one is struck by the differences with our currrent circumstances.  In the 90’s, we had the Peace Dividend with the fall of Communism and a general rightward tilt in terms of economic freedom worldwide, the elimination of the S&L Crisis, the development and dispersal of a wide variety revolutionary new technologies in the Internet, cell phones, computing and medicine, and conclusion of the Uruguay round of world trade talks which set the stage for globalization.  In other words, there were gale force tail winds which Clinton expertly sailed.  These tail winds allowed him to raise taxes without killing the golden goose.  In fact that was a prudent tightening of fiscal policy for the time as it helped reduce the level of growth that otherwise would have taken place and helped keep inflation from getting out of hand.

The economy, with such strong underpinnings, succeeded wildly DESPITE the tightening of policy that tax increases represented. Demunists like Hoyer for some reason believe that higher taxes CAUSED the prosperity of the 90’s.  A stunning misreading of history for one at the highest levels of policy making in our great country, and one that sadly pervades the Democratic worldview.

Now fast forward to today.  I will agree for the sake of argument with the left that the Iraq war, while it had the positive benfit of ridding the world of Saddam Hussein, was nevertheless ill-considered in that it enatngled us for years in the middle east with great cost and with an arguably deleterious effect on our standing with many friends and foes, with whom we now find ourselves at a loss of traction on subsequent issues ranging from sanctions on Iran to combatting terrorism and many others.  Economically the problem is that it just costs alot and thus increases pressure on the federal budget and hence on the need to raise taxes.  In so many other ways the current situation also differs from the 90’s.  Rather than Tail Winds we have gale force Head Winds.

First is obviously the epochal credit crisis and its aftermath.  Rather than being on the cusp of a great surge of global wealth creation, as we were in the 90’s, we have just witnessed spectacular wealth destruction.  Demographically we are on the cusp of a bubble of retirement and have promised the retirees massive state pension support in the form of social security and medicare.  Foolishly, as is usually the case with Washington, the age for retirement was not indexed to life expectancies, which have lengthened greatly since the programs were enacted.  So we now can expect to pay many more years of benefits to tretiress than was contemplated at program inception.  Other head winds include the fact that there are increasing numbers of religious fanatics who want to end the way of life of the West.  The general tilt of politics has been towrd less freedom rather than greater for the last 5 years globally.  It would take years to overcome these head winds under the best circumstances.

But of course America elected Barack Obama and a Democratic congress.  So we are not going to have the best circumstances for growth.  Instead we have people who believe that raising taxes will somehow spark risk taking.  It won’t.  We have people who believe that more regulation will spark risk-taking.  It won’t.  We have people who believe that it is a good idea to send 100s of Billions of Dollars to the third world to atone for climate changed caused by our past development and as if that wasnt bad enough, to double the cost of energy to our own economy and then try to tell us that there will be a net benefit in the form of “green jobs”.  There won’t.

Will raising taxes and returning to the glorious Clintonian past by tightening fiscal policy be the right prescription in the current circumstances where we have Head Winds rather than Tail Winds?  It won’t.

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