The Clinton-era tax rates fallacy
Over the last few years, President Obama and his many surrogates have made the case that if America was to return to tax rates on the wealthy that were seen under President Bill Clinton, America would once again become the land of milk and honey.
This argument is, unfortunately, a false one, for a number of critical reasons. Here are several:
First, the simple fact is that President Clinton spent much less than President Obama. While the Fiscal Year 2012 numbers are not out yet, some perspective is available: the federal budget went up by 60% in inflation-adjusted 2010 dollars between 2001 (the last year of a Clinton budget) and 2010.
As Michael Medved noted on November 24, raising taxes only on the wealthy wouldn’t institute the same tax system as seen in the 1990s – the left often fails to point out that most of the much-maligned Bush tax cuts went to those making under $250,000 annually. So if President Obama wants the same tax rates that allegedly helped give us surpluses in the 1990s, he should be willing to raise tax rates on all Americans.
Third, the Clinton-era economy ended with a recession in 2000 and a deficit of over $100 billion, meaning the land of milk and honey ended rather nastily. Of course, proponents of big government never talk about these two facts.
The technology boom fueled the good economy under Bill Clinton (and, of course, a Republican Congress), something Washington never could have envisioned or launched. Much like the housing boom that crashed a few years later, though, that boom ended in a recession. So if Clinton is going to get undeserved credit for the technology boom, he should get undeserved blame for the recession.
Fifth, Clinton vetoed welfare reform twice, before being overridden by his Republican colleagues in Congress. Which means one of the major deficit reduction laws under President Clinton was opposed by Clinton.
Sixth, the major liberal policy pushed by President Clinton – HillaryCare – never became law. After the GOP takeover of the House and Senate, Clinton became a very moderate President. So for Bill Clinton to travel the country talking about his success as President, and how those successes would be relevant in today’s world with the very liberal current resident of the White House, is very intellectually dishonest.
Seventh, many proponents of centralized control of our lives say the Gramm-Leach-Bliley Act was a major cause of the 2008 financial crash, as it deregulated many aspects of the financial industry. Assuming for the moment that these people are correct, Gramm-Leach-Bliley was signed into law by Bill Clinton (and voted for by Vice President Joe Biden, then a Senator) and backed by Clinton staffer (and future Obama staffer) Lawrence Summers.
It’s easy for political pundits and politicians of all stripes to look back on the past with rose-colored glasses. Republicans do it with Reagan, Democrats do it with Clinton. But as Washington considers tax increases and meager spending reductions, it is incumbent upon grassroots activists to know and apply the real facts of the Clinton Presidency.