If it wasn't for democrats pushing for loans to the poor, there would not have been a need for a bailout either. I don't see the need for a bailout anyway.
The latter half of the 90's was much different than the first half, and the latter half was dominated by a republican congress. There was a tax cut in 97.
great article here: http://www.safehaven.com/showarticle.cfm?id=11722&pv=1
I am not a big fan of whole article cut and paste but I like this
Let's sum it up. Here is what faces President Obama. The economy is in a recession that is getting worse by the day. This is the first consumer-led recession in 27 years. Unemployment is rising and the time between jobs is probably over ten months by the time he takes office. The US deficit is likely to be soaring above $500 billion. Consumers are retrenching, hit by the double whammy of falling home prices and seriously lower stock values and retirement savings.
You will not have the luck of George Bush to have consumers borrow $500 billion a year from their homes and resort to a negative savings rate. Banks will be cutting back on consumer lending, and consumers will be cutting back on spending and increasing their savings. The economy is unlikely to begin even a slow recovery until later in 2009, without serious and continuous large deficit-busting stimulus packages. Even then, the recovery is going to be prolonged, because the causes of the recession are the bursting of the twin bubbles of the housing and credit markets. These problems cannot be solved in a short amount of time. It will be several years into your administration before the housing market recovers, and the credit markets will be on life support for some time.
The Fed has run up its balance sheet by over a trillion dollars. Interest rates have been cut to less than 1%. There is no cavalry coming from the Fed to save the economy with more rate cuts.
What are your options? You have made promises to various constituencies. One is a tax cut for 95% of Americans. The problem is that 47% of Americans do not pay taxes, so what you are really talking about it a massive expansion of welfare. But if you use that tax increase on the "rich" to pay for your "tax cuts" to other Americans, you have no money to pay for other programs, let alone get anywhere close to a balanced budget.
And of course, as each year passes there is less net Social Security income to the government. If you use your tax increase to fund more expenses today, you will not have that to fund Social Security in 2017 when the program goes into a cash-flow deficit. Or, taxes will really have to rise later in the decade. But then again, that will be another president's problem.
How do you offer the increased medical programs you propose if you use the tax increase for tax cuts for 95% of Americans (read: welfare for 50%) without really busting the budget? Or any of the $600 billion in programs that you want to see?
And your serious economic advisors are going to point out (at least in private) that raising taxes on the 5% of wealthiest Americans is eerily similar to what Herbert Hoover did in his administration, along with legislation to restrict free trade and increase tariffs, which you have also advocated. Look where that got him and the country.
75% of those "rich" you are targeting are actually small businesses that account for 50-75% (depending on how you measure growth) of the net new job growth in the US. When you tax them, you limit their ability to grow their businesses. Further, you reduce their ability to consume at a time when consumer spending is already negative.
in short, it looks like we are screwed
The latter half of the 90's was much different than the first half, and the latter half was dominated by a republican congress. There was a tax cut in 97.
great article here: http://www.safehaven.com/showarticle.cfm?id=11722&pv=1
I am not a big fan of whole article cut and paste but I like this
Let's sum it up. Here is what faces President Obama. The economy is in a recession that is getting worse by the day. This is the first consumer-led recession in 27 years. Unemployment is rising and the time between jobs is probably over ten months by the time he takes office. The US deficit is likely to be soaring above $500 billion. Consumers are retrenching, hit by the double whammy of falling home prices and seriously lower stock values and retirement savings.
You will not have the luck of George Bush to have consumers borrow $500 billion a year from their homes and resort to a negative savings rate. Banks will be cutting back on consumer lending, and consumers will be cutting back on spending and increasing their savings. The economy is unlikely to begin even a slow recovery until later in 2009, without serious and continuous large deficit-busting stimulus packages. Even then, the recovery is going to be prolonged, because the causes of the recession are the bursting of the twin bubbles of the housing and credit markets. These problems cannot be solved in a short amount of time. It will be several years into your administration before the housing market recovers, and the credit markets will be on life support for some time.
The Fed has run up its balance sheet by over a trillion dollars. Interest rates have been cut to less than 1%. There is no cavalry coming from the Fed to save the economy with more rate cuts.
What are your options? You have made promises to various constituencies. One is a tax cut for 95% of Americans. The problem is that 47% of Americans do not pay taxes, so what you are really talking about it a massive expansion of welfare. But if you use that tax increase on the "rich" to pay for your "tax cuts" to other Americans, you have no money to pay for other programs, let alone get anywhere close to a balanced budget.
And of course, as each year passes there is less net Social Security income to the government. If you use your tax increase to fund more expenses today, you will not have that to fund Social Security in 2017 when the program goes into a cash-flow deficit. Or, taxes will really have to rise later in the decade. But then again, that will be another president's problem.
How do you offer the increased medical programs you propose if you use the tax increase for tax cuts for 95% of Americans (read: welfare for 50%) without really busting the budget? Or any of the $600 billion in programs that you want to see?
And your serious economic advisors are going to point out (at least in private) that raising taxes on the 5% of wealthiest Americans is eerily similar to what Herbert Hoover did in his administration, along with legislation to restrict free trade and increase tariffs, which you have also advocated. Look where that got him and the country.
75% of those "rich" you are targeting are actually small businesses that account for 50-75% (depending on how you measure growth) of the net new job growth in the US. When you tax them, you limit their ability to grow their businesses. Further, you reduce their ability to consume at a time when consumer spending is already negative.
in short, it looks like we are screwed
