Tuesday, October 28, 2008

The Age of Prosperity is over

Arthur Laffer
Bill Clinton and Alan Greenspan added their efforts to strengthen what had begun under President Reagan. President Clinton signed into law welfare reform, so people actually have to look for a job before being eligible for welfare. He ended the "retirement test" for Social Security benefits (a huge tax cut for elderly workers), pushed the North American Free Trade Agreement through Congress against his union supporters and many of his own party members, signed the largest capital gains tax cut ever (which exempted owner-occupied homes from capital gains taxes), and finally reduced government spending as a share of GDP by an amazing three percentage points (more than the next four best presidents combined). The stock market loved Mr. Clinton as it had loved Reagan, and for good reasons.

The stock market is obviously no fan of second-term George W. Bush, Nancy Pelosi, Harry Reid, Ben Bernanke, Barack Obama or John McCain, and again for good reasons.

These issues aren't Republican or Democrat, left or right, liberal or conservative. They are simply economics, and wish as you might, bad economics will sink any economy no matter how much they believe this time things are different. They aren't.

Or as a really smart engineer once said ..
"Look," Arabian said after a pause, "you know this is no problem and I know this is no problem. But if the battery screws up, I'm going to say so. And if a tank screws up, I'm going to say so. And if the crew screws up, I'm going to say so. Fellows, these are just systems, and if you're not honest with yourself about what went wrong, you ain't gonna be able to fix anything."
blog comments powered by Disqus