How much of the Economic situation is Bush's fault or credit ?

Great Debates
1

I see a lot of Bushites lauding Bush’s economic record. When I argue that a lot of jobs were lost most say it was 9/11’s fault. That got me thinking that its pretty hard to pinpoint anything besides the deficit as being “wrong” with Bush. Even the deficit can help fuel economic growth too…

So what exactly can we pin on Bush ? What is 9/11's fault ? What did Bush actually manage well in the economy ? Should we determine what Bush actually had control over vs didn't ?

Bush Responsible (good or bad):

Deficit, excessive spending, more bureacracy, protecionist measures, Iraq, ME instability and consequently Oil prices ?, less environmental regulations, tax cuts

Bush not Guilty:

9/11 (well not that we can prove… hehe), economic cycles, “terrorism”

Undecided:

Weaker dollar was Bush ?

2

I don’t think that presidents generally have much over all control of the economy, though certainly they rise or fall based on it. Over all, I think the only substantial thing that presidents bring to the economy is…confidence.

Certainly a large part of the current deficit can be blamed on Bush (though this isn’t necessarily a bad thing, in and of itself…i.e. a deficit isn’t necessarily a bad thing if it sparks growth)…however circumstance certainly also played a large role. We were already in a recession before Bush took office and the economy was certainly taking a down turn. In addition, 9/11 didn’t help the situation. Its a confidence thing, and 9/11 shot US confidence at all levels right in the nuts.

Bush’s strange two way policies also didn’t help…i.e. on one hand reducing taxes to increase potential growth coupled with vast and massive increases in government and social programs.

The oil price instability I think was coming reguardless of what Bush did or didn’t do. Certainly Iraq was a factor, but it would have been skittish reguardless (assuming we invaded Afghanistan anyway). So I don’t think you can blame Bush on this one, except peripherally.

I don’t really see the Bush presidency as the environmental disaster that many are ranting about, but I also don’t think this had any impact on the economy so I’m unsure how this goes with the OP.

The strength or weakness of the dollar had nothing to do with Bush…its all about the foriegn currency market and various nations manipulating it to their individual benifits.

-XT

3

Exactly because presidents don’t have a lot or direct control of the economy that I think its important to determine what is or not Bush’s doing and its relevance. There are a lot of economic factors that can be good or bad like deficit… though deficit is a sure party booper in the future.

As for confidence… I did see some articles saying that Bush beating the alert drum way to often and also repeating “things aren’t going well” economically became a self fulfilling prophecy. So “confidence” would be bad factor on Bush.

How pricey was the oil before, during and right after Afghanistan ? I still think Iraq was way too much for the market. High oil prices I feel confident to blame Bush. Naturally it would still be higher than before 9/11… just not so much !

The dollar I think was devalued on purpose… this would help boost exports and minimize trade deficit problems. If it was Bush’s “decision” then he should get credit. Overall I think it was good for the US… but the jobs still didn’t come. (long term weaker dollar can be dangerous… inflationary wise or by increasing import costs)

Things weren’t exactly rosy before Bush took office… and 9/11 sure dropped the market… but Bush should be judged for either not picking up the economy again or for “starting to bring it back”. 9/11 fucked things up… but has Bush helped recover after that is the main issue.

4

Pardon me for being so blunt, but the idea is ludicrous. Not than I am a Tolstyite, (warfare is somewhat different to economics after all), but if if Bush has done any good at all, it is purely accidental.
I’m only posting this to degenerate the man, which is unfair!

5

Was coming? It already was unstable before Bush took office. In 1999 the gas prices up here fell to just under a dollar during the spring, and the news reported that they were very low around the whole country. Less than a year later they were approaching $1.70 and eventually topped at a dime higher in summer. Gas prices have been capricious for a while now so I don’t think we can pin the flux on any particular president.

6

First, if the President has no impact on the economy (no one is ever claiming the president of the Fed has control) why sell the tax cuts to improve the economy? You can’t have it both ways.

Yes, there was a recession, which was not Bush’s fault, and it was one of the more minor recessions in memory. He can’t get credit for it being short either, because the tax cuts hadn’t cut in yet. So you can’t blame our plight on the recession.

9/11 was three years ago! It did hurt, for the moment, but no one is not going shopping today because of 9/11. Pitiful excuse.

Deficits and tax cuts, both, should help the economy. Deficits may hurt by decreasing liquidity, but with low interest rates there is no shortage of capital. In the long run we may get screwed, but that can’t be the answer.

So why should tax cuts help the economy? It puts more money in people’s pockets to spend. More spending, more demand, more need for production, more investment, more jobs, and still more money to spend. But these tax cuts put the money in the pockets of people unlikely to spend more. Yes, they might invest more, but if factories are not fully utilized, why expand them, why hire more people? So the tax cut, as lots of people said at the time, was misdirected.

As the recent report indicated, salaries have hardly kept up with inflation, not to mention the loss of jobs and the fear of loss of jobs. If people weren’t taking money out of their houses, it would be even worse. Low demand, low recovery.

We’ve also discovered that high health insurance costs have made employers less likely to hire people full time. (I know people kept at just enough hours to not qualify for benefits.)

You guys sound like Jimmy Carter, wringing his hands, saying that there is nothing that can be done. Bull. If Bush faced facts, if he had some competent advisors who face reality, not run on dogma, the unemployment rate would be way down.

At least you’re not claiming, like he is, that the economy is good. (Or turning the corner. :)) So now, just admit he screwed the pooch.

7

Okay, here’s the best I can do at a non-partisan answer:

What Bush did after 9/11 is a classic Keynsian ‘pump priming’. He cut taxes and raised spending. Given that, it’s probably the case that the economy would be somewhat worse at this instant in time than it would have been had Bush not done those things.

However, the cheque still has to be paid. The bad thing about Keynsianism is that you do have to pay back the loan at some point. When that happens, it will cause an additional drag on the economy over and above what the economy is doing at that time. Keynesians actually like this, as they think it helps moderate the business cycle - heat up the economy during a downturn, and cool it off during a boom.

Anyway, I would guess that the effect of Bush’s policies might be half a point of GDP at most. The downturn in the economy was inevitable after the double shock of the Dot-com bust and 9/11. A short recession was coming no matter who was elected.

I think Bush was right to cut taxes. I think he’s raised spending far too much, especially in wartime. Wanting both Guns and Butter is a guaranteed road to a large deficit. So Bush screwed up somewhat. I’d give him a Gentleman’s C.

8

So much for “The buck stops here,” eh?

And here I thought there was somebody who was pushing for massive tax cuts for the rich while trying to sell an expensive war with Iraq, and downplaying all the folks who were fretting about the costs at the time…

9

Sam, the issue is not whether taxes should have been cut, but how. He cut taxes in a way that didn’t help demand. Not all tax cuts are created equal - his ideology and his dogmatic desire to cut taxes for his buddies caused an incredibly ineffective tax cut. I don’t know if we’d be in better shape with no tax cut or not, I am pretty sure we’d be in better shape with a tax cut directed towards those who would actually spend the money.

10

The buck stops here was mostly a bit of arrogance on Truman’s part. Because it overstates the true importance, control, and effect that the President actually has.

It’s also an admirable “I’m always ultimately responsible” sort of thing, which can be admired greatly.

11

The deficit is growing. Which is an inevitable consequence of raising government expenses while lowering government income. President Bush did both. He pushed for a war in Iraq and going to war is the most expensive things a country can do. And he pushed for tax cuts and became the first president to ever reduce taxes during wartime.

12

Voyager said:

That’s a fair point of view. Bush’s tax cuts were more classical supply-side cuts, stimuating investment and production. But there is good evidence that the demand side was hurting just as bad.

On the other hand, if the reduced demand was due to war jitters, then stimulating it might not work that well. I think reasonable people can disagree over whether the supply-side cut was the way to go. I think that it definitely is in the long run, but a short-term argument for a demand-side stimulus is reasonable.