How Clinton Balanced the Budget
The rich paid more taxes and the economy grew
Near the top of the list is the balanced budget constitutional amendment, a durable fake pulled out of mothballs by Republicans and Democrats alike in the hope of proving their determination to assert spending control. State legislatures pass resolutions favoring the amendment, and congressmen and senators issue press releases demanding its passage, knowing that the thing will never quite materialize and that, if it did, the consequences would be awful.
The amendment's latest versions, like all that have come before, are shot through with loopholes and air pockets—such as the exception for periods when the country is at war, as we have been for nearly the past decade.
Then there is the House Republican plan to slash domestic discretionary spending and then freeze it for the next 10 years at the same level as 2006, which sounds reasonable until you realize that would require reductions of more than 40% in essential government services like border security, federal law enforcement, food safety, education and environmental protection.
For politicians who are more or less on the payroll of the coal industry or the meatpacking cartel, that doesn't necessarily sound so bad. As long as nobody is dying from E. coli poisoning in the Capitol Hill cafeterias, maybe they believe we can afford to lay off half of our agricultural inspectors for the next 10 years. Meanwhile, the rest of us belong to that “special interest” group that breathes the air, drinks the water and wonders what hellish bugs lurk in that package of hamburger.
Clinton Succeeded Where Reagan Failed
Variations on these ruinous themes currently abound
in Washington, where nearly every elected official is eager to prove that he or
she is a single-minded accountant with the same mindless mind-set as the tea
party. So Sen. Claire McCaskill (D-Mo.) has joined with Sen. Bob Corker
(R-Tenn.) to propose that annual federal spending be limited to no more than
one-fifth of the gross domestic product. That sounds reasonable, too, until you
realize that the nation's aging population and rising medical and pension costs
will inevitably require us to spend more, not less, to keep the elderly out of
poverty.
No doubt there are sensible cuts to be made in
federal spending, starting with the bloated defense sector that the Republicans
continue to hold sacrosanct (presumably because it is such a rich source of
legal and illegal graft). The curve of health care spending must be bent
downward, too.
But if we honestly wish to bring the federal budget
closer to balance, without wrecking vital services or plunging the nation back
into recession, why not consult the record of the one president in recent
memory who actually achieved that goal? Not Ronald Reagan, the affable wing-nut
whose tax cuts blew open a huge deficit, but Bill Clinton—who left balanced
budgets and a nation on track to paying off the national debt entirely.
How did he do it? Clinton isn't shy about explaining
what happened on his watch. The budget deals he made with the congressional
Republicans were significant, but not nearly as significant as the tax increase
on the wealthy that he passed, without a single Republican vote, in his first
budget in 1993.
Voting to raise taxes on the rich was the crucial
step toward fiscal responsibility and a long period of high employment,
national prosperity and international prestige. There is no other way to
stabilize the budget without inflicting grave damage on our future.
2011 Creators.com
I remember when Clinton was elected in Nov of 1992, the company I worked for panicked and cut out all year end bonuses. They feared taxes would go up and the company would need the cash. Turns out it wasn't that bad but i sure could have used the extra $5 to $10k that year. Just the fact a Democrat got elected scared the crap out of a business and hundreds of employees saw their pay drop about 10%. Obama understands this and knows its not good politics to tax the harder working, higher income people. Its better to tax the ones who don't understand finances, choose to earn less, and choose not to embrace capitalism. Its better to tax the liquor-lotto types who walk around with a bad haircut and wear bowling jackets. As long as they get some kind of refund, they think they didn't pay any taxes. If we are going to balance the budget, this is wear we can raise taxes. Not on the wealthy who also show a tax loss.
you sound like a politician! Make the uneducated pay more because they are too stupid to do anything about it. They CHOOSE to make less. nevermind underlying circumstances. Tax cuts for millionaires, that is what makes sense. They deserve it! They were so smart they just worked up the capitalist ladder fair and square. Bottom line is the Banks and Big Businesses control our country while any middle class citizen who suffers a serious injury will be broke paying hospital bills for the rest of their life. We suffer for your careless greed.
We really have no choice but to make the poor and uneducated pay taxes. The more ambitious and harder working types will hire good accountants to keep from paying taxes. The liquor-lotto-tavern drunk W2 types - you can tax them hard. The smarter 1099 types pay themselves a small salary to avoid payroll tax. Then pay themselves a dividend with isn't taxed so heavily. Of course Warren Buffet has a lower tax rate than his secretary. He probably has no salary so no payroll taxes. He probably is heavily invested in double tax free municipal bonds. Then of course dividends and capital gains which are taxed at a lower rate. (Thank you Mr. Obama). Our tax code is designed to reward the weathier harder working people. If we tax the rich too much, they will move their money to Monaco or the Bahamaa. They will stop investing in municipal bond programs which fund our schools and hospitals. They stop working harder and smarter because there is no incentive. I have a lot of friends who's hobby is to save and invest rather than blow their money on boats and booze. Why should they be punished for saving and investing?
David, way to top-post above my answer below!
There's nothing wrong with allowing someone to keep a part of what they earn, even if it is "mailbox money" that they don't punch a clock for. The point is the degree of how much to keep, how much to give back. I still support the idea of progressive taxation, not regressive taxation.
What I do not like is the trend to a 2-class society, with an extremely wide gap between. We all know that we collect taxes for the express purpose of defending from invaders, and for redistribution to cover both the worker down on his luck and the supposed few who never will fully take care of themselves.
It's just that those who think they are high enough up to think they are not receiving or never will receive any benefit want to pull themselves out of that "social insurance risk pool", not pay anything at all (save defense of their property or way of business). That leaves only those who get/need benefits to tax themselves to take care of themselves. Pure socialism for that lower group, no support from the upper group.
That may be sustainable long term as long as all wealth in the lower group stays in the lower group, does not move or "redistribute" to the pockets of the upper group.
The turning the US into no better than a Banana Republic with a dictator, a few agents of control working for that dictator, and lots of peasants. Thanks, David for showing yourself as wanting to be one of those allowed agents, I understand you must continue kissing the rings of the lords of the manor.
I don't think anyone disputes that someone who worked hard for their money doesn't deserve some kind of tax break... But's the key... WORKED for their money.
I have an issue when someone like Warren Buffet had said that his personal secretary was in a higher tax bracket than he was. He did not mean that he had losses, therefore no profits, thus no taxes owed, or that he was living off of savings. I think he meant that while a person with a 200,000 W2 was in a 35% bracket under Bush 2, but under Clinton was in a 39% bracket, I think he was referring to the fact that dividend payouts and capital gains, even big dividends and cap-gains, both of those are taxed at a rate far less than even Bush 2's 35%. Note - when I first hit the workforce in the mid-70's, the top tax bracket was 70%, and some quick internet searching shows the top bracket was at around 90% during the undeniable "good old days" of the 50's.
That's what gets me. W2 pay is pay someone WORKED for, whereas dividends and cap-gains is money that a person just sits back and collects in their mailbox, they do not work for it anymore. Oh, they had to make a lucky decision of where to invest, usually with money they already had paid tax on from their W2. It's the GROWTH of that investment that should be taxed at a level at least as high as that for which a clock-punching laborer or salaried semi-pro worker pays, or even a slick-talking, tell-the-client-what-he-already-suspects consultant is taxed.
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Of course, you could take a real hard-nose point of view. The argument at hand today is nothing more than to cut out all hand-outs to those who are not as devious and opportunistic as the hard-ball player in corporate business (who made a CHOICE to be that way).
Here's what Wisconsin wants... stop all medicaid to the inner city hood-rats and welfare queens, especially since we all know that they are a different color, or different voting record, like hippie-yuppie Abele, or wear bling and pants on the ground like a thug rapper. I use all these colorful terms because that's how many of you are already thinking, don't need to see someone put it in print!
Of course, got to keep paying those agricultural subsidies, those corporate welfare subsidies, at least somebody of the right color and pay-class is getting that money, enough to live large like they deserve.
Stop all that SS payments to those too old to work, they were supposed to die and give it to their kids. Stop all subsidies to inner city schools or to bus-lines for those who nobody wants to work alongside of anyway. Stop all those day-care subsidies to get the daycare to accept a welfare kid over a bona-fide working mom's kid.
Take EVERY out-of work person who is not able to pull their own weight, shoot them dead (you Jared Loughner's should cover your eyes when I write this, it's just talk to get others all heated up). Kill all the kids and moochers in the house while you are at it, too. No more need for those subsidies.
And no more Quest card carrying customers walking into DJL's clients stores, so close those stores, more unemployed store employers, manager included, to take out of the cash flow for bad problem.
No more bus drivers needed, same with all their mechanics and office staff. Make them dead and no longer consuming precious resources. Same with the workers at the factories that made the buses.
No more state workers needed to administer all those welfare programs, now we got white Madison liberals dead, no great loss to you. And they won't be shopping anymore, won't be paying utilities anymore, more out of work people.
And nobody to buy big-screen TVs with their EIC refund anticipation loans in time for the SuperBowl, so even Best Buy and American TV will put more folks on that chopping block.
It all keeps rippling up, like trickle-down was supposed to feed all of us lower ranked people in the US of A.
One thing I do know. Both the hourly worker and the welfare case will spend it all in a local store, local bar, (or local drug-dealer, who also buys in local stores). They will not turn around and buy stock in some emerging asian economy like Bill Gates or Warren Buffet is likely to do. Of course, we need to try it first to see what will happen.
Meanwhile, our American capitalist machine-tool companies that fed Detroit their assembly lines were bought out by a European socialist, then promptly moved out of Wisconsin into a right-to-work hill-billy town, since the pay class there was far less than what that European company had to pay in their own public-dollar educated socialist hinterland or our 100% union-dues participating midwest. -- Get that? They outsourced to poor parts of the US! But only to make what the US would buy, they made their own stuff at home.