A huge tax cut while starting 2 wars ,which were unfunded, guaranteed blowing the surplus and plunged us into a huge deficit. Then the drug bill, which he forced his people to lie about cost us billions more. Of course blowing billions on mercenaries with Repub political ties was not much help.
TARP is another Repub program. It cost 3/4 of a trillion. It of course enriched the bankers who blew up the economy. It could have been worse. Paulson made a move to takeover the recovery and be answerable to no authority. That was scary ,because he almost pulled it off.
Bush’s tax cut haunts us today. It is like writing a 3.1 million dollar check to the top 1200 richest people in the country, year after year. Some people are dumb enough to think it is a good idea.
I thought the idea of Keynesianism was for the government to save money during the good times and spend during the bad. Was the economy in bad shape during the entire Bush presidency, such that it required a Keynesian stimulus?
Since the marginal propensity to spend is lower for rich people, Keynes would probably turn over in his grave. Given that we had excess capital to invest and insufficient demand it was not what a Keynesian would propose. Either increasing Federal spending or tax cuts for the lower 75% of taxpayers would have created more stimulus. The correct thing to do of course, would have been to not cut taxes on the rich and continue to pay down the deficit so that we had breathing room to increase spending during the downturn.
Ignoring budget deficits, starting wars that will cost trillions on borrowed dollars, ignoring the credit debt swap derivatives market and cutting taxes pretty much covers the broad strokes. The Republicans controlled the executive branch, including the SEC and Justice Department the entirety of this time and filled both with people less qualified than Mike Heckuva Job Brownie was to run FEMA pretty much insured what happened.
The Democrats are as responsible as the general electorate for not stopping any of this. Enforcement of the laws and administering balanced budgets were solely Republican responsibilities from Jan 20, 2001 to Jan 20, 2009.
Republicans only care about fiscal responsibility when Democrats are in office.
My impression is certain policies intertwined to help create this situation:
A deregulated housing market that resulted in unsustainable trillion dollar bubbles
A middle class that cannot survive w/o large amounts of debt
Large amounts of public debt
Much of our current problems seem due to these problems and all the side effects of them (trillions in lost equity, fear of economic insecurity, lack of confidence, lack of consumer demand, massive unemployment, etc)
I don’t know if Bush personally played a ‘huge’ role in them. I know that Elliot Spitzer of NY tried to sue the federal government to get them to to regulate the housing market better, but was stopped by the Bush admin.
However the policies of massive deregulation which created a financial system that is dangerous interdependent (meaning if one large company goes down it creates a domino effect) supposedly started under Clinton. I was watching a PBS documentary not long ago that said the global economy almost collapsed in the 90s (I forget when, maybe 97) because one financial company was about to fold and it would create a domino effect. And people like Rubin and Summers were involved in that too. Luckily I guess Rubin and Summers convinced other financial interests to buy up the company and disband it rather than let it fold. But the collapse of 2008 could’ve happened a decade earlier, that was my impression.
I think Reaganomics is to blame for these problems, and has had its day in the sun and needs to be retired. Bush promoted Reaganomics but I don’t think he can be totally blamed for what happened. However the GOP will push for more Reaganomics which will further destabalize the middle class (and destroy consumer demand with it) and allow trillion dollar bubbles to happen in the financial markets.
Wars end; entitlement programs and bureaucracies only get bigger.
Funded wars could end. Unfunded wars linger forever.
The largest amount of health care dollars for WW2 soldiers was about 50 years after the war ended. Do you dream that all the wounded soldiers will just disappear from the budget? That “entitlement” cost will bury your grandchildren.
Oh, well - that makes foolish spending on unnecessary wars OK then. Now it’s just the senseless bloodshed that bothers me.
I understand much better now what the Democrats are saying about Bush policies.
Many of the comments are directed toward deficits and the role that the wars played in the deficits. If the wars cost about 800 billion in the last 9 years (from what I have read), that does not seem to be enough of the about 23 trillion our government has spent in the past 9 years to “drive the economy into a ditch”. the wars account for 1/25th of the spending during this period of time (and less that 1% of the gdp for 2001-2009)
from what I can determine, the statement about the ditch/cliff, basically comes down to two thing:
1, deficit spending, including not raising taxes to pay for the wars. I see here a strong consensus of Bush’s critics that the “tax cut for the wealthy” is the main culprit. I am having trouble finding out what the tax cuts to the wealthy actually cost.
The Bush tax cuts, as I understand them, lowered taxes for everyone, lowered taxes on dividends and capital gains, and got rid of the estate tax. When people write about the cost of the Bush tax cuts, they don’t differentiate, as far as I can tell, between the tax cuts everyone seems to favor (the parts that Obama wants to continue) and tax cuts for the wealthy that most seem to find so odious. The total cost of all the tax cuts (tax cut bills of 2001 and 2003 together) to date is, from what can determine, is 1.2 trillion, but that includes all the tax cuts. Does anyone know what number for tax cuts “to the wealthy” (how many dollars per year income is considered “wealthy” by those who use the phrase “tax cuts on the wealthy?”)
all that said, I don’t see how the deficit from the wars or tax cuts on the wealthy “drove the economy into a ditch”. from what I can determine, in 07 the entire deficit was 1.2 percent of the gross domestic product.
- lack of regulatory foresight. it seems pretty clear that the recession was not caused by deficits. of the “25 reasons” (I also would include Barney Frank and Chris Dodd), lack of regulation in sub prime mortgage and in new financial instruments is seem to the only “Bush factor” that really can be called a proximate cause of the recession/meltdown (the recession caused the debt/deficit to be larger vis a vis the gdp. the debt/deficit did not cause the recession)
so back to the second part of my original question: what legislation or steps did the Democrats recommend prior to summer of 2008 in these two areas, mortgages and finance industry, that would have keep the car out of the ditch? If they saw the economy being driven off a cliff, what did they do to stop it?
Only a handful of people saw the great recession coming, and I don’t think the Democrats claim to have been in those ranks. Their argument is they wouldn’t have driven us off that cliff. But as you say, that’s a very hard thing to know for sure, and it’s not like Bush did anything radically different wrt oversight of the financial institutions.
You’re over-analyzing a campaign slogan. Don’t take that personally. I’m not trying to rebuke your anything. It’s just that these things don’t lend themselves to the kind of scrutiny we are capable of here.
I’ve posted in several threads about the financial meltdown. Fannie and Freddie had little to do with it. Their current financial condition is the result of the meltdown, not the cause of it. And yet you still bring up with falsehood every time you have the opportunity.
To the extent that direct federal lending of student loans is a turd in the punchbowl, it has been there since the beginning of the federal student loan program. What does it matter if we guarantee the student loans versus actually make the student loans? We have simply eliminated the middleman who did NOTHING but collect fees. The form that students fill out is provided by the government, the approval is based on government criteria, the interest rate is based on government prescribed rates, the only thing the bank does is collect an exhorbitant processing fee (without taking any risk) and a percentage of the itnerest payments (once again without taking any risk).
Money given to banks which was supposed to go for loans, which would help the economy get going again, went instead for million dollar bonuses to CEO’s is hardly Obama’s fault.
It only goes to show how corrupt the banks really are.
It’s clear (hey, if the OP thinks “it’s clear” is great reasoning, then why not use it?) that had Al Gore been president that he would not have proposed and passed unfunded tax cuts for the wealthy and wouldn’t have bought the bullshit about Iraqi WMD. Shit, he may have even read the Aug 6, 2001 memo warning “Bin Ladin determinted to strike in US”. It’s clear that if Al Gore had been president from 2001 to 2009 that Republicans in Congress would have criticized all deficits and all his proposals. The Democrats did fail to criticize Bush Administration proposals adequately, but the OP didn’t ask that.
The country needs the Republicans in the minority and out of the executive branch because Republicans screw up being in charge and Democrats screw up being opposition.
“Not his fault” doesn’t mean it’s not his responsibility. He’d just watched the banks start going bust, one by one, so it’s not as though he shouldn’t have known they weren’t to be trusted.
However, I do think TARP and ARRA were both necessary to restore public confidence and prevent an even worse drop in the short-term money supply.
The banks are getting money for almost free. They have discovered they can make a lot of money without risk by buying tbonds. They also can jack up interest rates and fees. They are assured of making a shit pot of money with no risk. Just gouge their customers.
Should there be a way to force banks to lend money to small businesses? We know employment would raise if they did. But is it because the bankers are republicans and want them back in power. Should Obama have nationalized one of the banks to get lending on track?
The Bush tax cuts had a big effect on tax rates on the lower and middle classes. You honestly don’t believe Bush’s tax cuts applied to the lower 75% of the economy?
The Bush tax cuts lowered the 15% tax bracket to 10%. They lowered the 28% tax bracket to 25%. They lowered the 36% tax bracket to 33%. And they lowered the 39.6% tax bracket to 35%. Three of the four bracket changes affected the lower 75% of the population. In addition, the capital gains and dividend cuts boosted many working class people’s retirement savings.
Bush also increased the child tax credit from $500 to $1000, which was aimed directly at stimulating demand among the lower and middle class families.
I also seem to recall at least one $400 rebate check being sent directly to lower and middle income families, and that this was specifically done to stimulate demand. This was very similar to the ‘helicopter drop’ demand stimulus idea.
The fed’s low interest rate policy put a lot of extra money into the hands of the poor and middle class, who are often up to their eyeballs in debt and benefit disproportionally from lower interest rates. Mortgages were much cheaper, allowing poor people to buy homes. The subsequent spike in demand for housing cause house prices to skyrocket, which many lower and middle class people took advantage of by refinancing their homes to give them extra cash to spend.
The last decade was one of continual attempts to stimulate demand through deficit spending.
This is flat-out wrong. The Democrats took control of both the House and Senate in the 2006 election. Barney Frank and Chris Dodd controlled the powerful finance and banking committees. During their reign, many warnings about the impending collapse of the financial markets were brought to them, and they did nothing. Actually, they did worse than nothing - they flat out denied there was a problem and went out of their way to try to keep the real estate bubble growing.
Not only that, but the Bush administration tried to sound the warning on financial regulatory issues many times right from the moment Bush was elected, and they were thwarted each time. And each time, the main opposition came from the Democrats, with just enough Republicans along to prevent action.
For example, we have this article from the NY Times, from 2003:
So how come this didn’t happen?
What happened in the 2000’s was that the Democrats were fully in favor of the loose money, loose regulatory policies in effect, because they were benefiting their constituents. Chris Dodd had a ‘friends of Angelo’ loan from Countrywide, which had him firmly in the tank. Every time someone tried to sound the alarm about an impending financial crisis, it was the Democrats who pitched a fit.
You simply don’t understand American politics if you think that the Democrats had the power to pass legislation from 01 to 09. During that time Bush threatened to and did veto every reform and he certainly would have vetoed such a reform. I hold the Republicans and their piss on down economics solely responsible for the collapse. Anybody with the slightest intellectual honesty would give the Republicans nine out of ten parts responsibility for the reasons already stated in the thread. The fact that the Republicans and their policies and apologists accept zero responsibility for the collapse and try to blame it all on Democrats when they had control of every executive function of the government, a majority on the Supreme Court and could obstruct any measure in Congress that they wanted shows how utterly irresponsible Republicans are and why they should not be trusted outside the opposition until they learn to stop fucking 95 percent of the American people for the benefit of the richest 5 percent.
Perhaps you could point just where in the following list of all the bills vetoed by GWB during his eight years in office he vetoed reform of Fannie Mae and/or Freddie Mac, or any other economic reform bill for that matter:
Gee, one would think the 95% getting fucked don’t have a vote. I wonder how the Republicans managed to figure out they could fuck 95% of the populace and still garner votes. And yet from 1968 to 2008, Democrats managed to hold the Oval Office for only 12 years and saw their decades-long congressional monopoly broken in 1994.
Looks like fucking over 95% of the American people has paid off well for the Republicans the last few decades…or perhaps, just perhaps, your claim that most of the American public are being deliberately and well fucked over by Republicans is nothing but partisan bias.
The first of Bush’s tax cuts was passed in 2001, and they are set to expire at the end of this year. Was Bush expecting, and preparing in advance for the economy to need 10 years of stimulus?