My visit to Andy Card at the White House in early 2003 led to the Bush tax cuts that are expiring,
and the payroll tax holiday I promoted from 2008- 2010 is expiring as well.
the Clinton boom
I went to a party once that was just so much fun that I didn’t want it to end, lots of good food, free beer and dozens of gorgeous babes. Unfortunately, 5 am rolled around and the host and hostess had to go to work so they could afford to give more parties and I, too, had to show up at the hockey puck factory so I could make the payments on my new Prius that I drive to cool parties.
Wait till I tell all my friends I’ve exchanged one or two comments with the man who destroyed the universe!
roger erickson Reply:November 18th, 2012 at 9:49 am
Warren has a monopoly on Universe creation/destruction, given where he’s sitting.
Discernment is the ultimate fiat currency in this Universe.
That must mean you were responsible for the Pelosi takeover of Congress in 2006. Remember how they preached fiscal responsibility?
WARREN MOSLER Reply:November 16th, 2012 at 1:52 pm
vincent Reply:November 16th, 2012 at 5:19 pm
When I’m out preaching MMT, and someone invariably tells me how the Clinton tax hikes led to the prosperity of the 90s, what to say? “Imagine greater prosperity” never seems to go that far, and there’s pretty wide amnesia for the 2000 recession. I need talking points!
WARREN MOSLER Reply:November 16th, 2012 at 9:25 pm
the deficits of the early 90’s caused the Clinton boom.
the tax rate increases caused the budget to go into surplus during the expansion
fueled by private sector credit expansion.
This was appropriate as the combo was sufficient to get unemployment below 4%
But when private sector credit expansion failed, which was inevitable as it was ultimately income limited,
the govt should have been much quicker to turn it all around with an appropriate fiscal adjustment
ESM Reply:November 16th, 2012 at 11:06 pm
“the deficits of the early 90′s caused the Clinton boom.”
I think that’s reading way too much into fiscal policy.
My view is that it was excitement over the internet that fueled the boom in the mid-90s. In fact, the start of the boom coincides very closely with the founding of Netscape in 1994. And of course the prior recession under Bush 41 was caused by a reduction in military spending after the end of the Cold War.
roger erickson Reply:November 18th, 2012 at 9:48 am
The internet boom was just the expression. Still couldn’t have happened without the currency liquidity to invest.
perpetual neophyte Reply:November 19th, 2012 at 8:11 am
The tax increases of 1993 came during 3 – 4% GDP growth. I believe the next year GDP dropped in to the ~2% range before growing again. Check FRED to confirm.
If you are going to raise taxes and cut spending, it seems more reasonable to do so during reasonably strong growth (vs the weak growth environment we have now).
Art Reply:November 23rd, 2012 at 2:34 pm
“When I’m out preaching MMT, and someone invariably tells me how the Clinton tax hikes led to the prosperity of the 90s, what to say? “Imagine greater prosperity” never seems to go that far, and there’s pretty wide amnesia for the 2000 recession. I need talking points!”
Also point out what happened to countries whose currencies and/or credit arrangements were USD-linked and where there was significant leverage in terms of credit and/or exports: Asian Flu, Russia, Argentina. China avoided most of the damage b/c it devalued big time around 1993, if memory serves. (I’ve asked friends over there if the PBC devalued preemptively b/c it knew the damage Lloyd Bentsen’s “strong dollar” policy would do. They insist it did not, but the timing was extremely fortunate nonetheless.)
Vincent Reply:November 20th, 2012 at 12:39 am
Thank you all! Now tell me why 1947-73 were the golden years for the middle class. What goes on with Krugman? And, why is 73 the end? Is he a gold bug?
WARREN MOSLER Reply:November 20th, 2012 at 10:44 am
stable oil prices as the texas railroad commission was price setter. the saudis took over in the early 70’s as demand outstripped texas supply, and they had a different agenda…
So, the truth is out. This whole fiscal cliff thing is your fault, eh Warren? :)
WARREN MOSLER Reply:November 16th, 2012 at 1:51 pm
guilty as charged
You’re also to blame for this Warren.
Jordan “Facing the spectre of bankruptcy”
They have their dinar, but don’t know how to use it?
Can someone tell them that there is, however, a free lunch at the dinar table?
It’s apparently pegged to the $US. If they removed the peg, maybe they could get lunch for everyone.
markg Reply:November 16th, 2012 at 10:44 am
While the lunch dinar may be free, the lunch food is not.
roger erickson Reply:November 18th, 2012 at 9:45 am
Either way, they’re paying with public initiative. Might as well optimally organize to optimize the dynamic value of public initiative.
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Warren B. Mosler