Question, Does this graph show any sign of recession after the start of 2009. Answer NO. Now that we have cleared that up, no one who is thinking with rational and logic can say president Obama owns the recession. Infact, what happened to boost us out of recession? It is no coincident that George W Bush signed a 1 Trillion dollar bail out package in Late 2008 and President Obama signed a $850 Billoin Bailout in 2009. Did they work? You be the judge. (The chart below may not be visable to those who receive this as an automatic email. Go to http://www.middleclassmanwi.blogspot.com/ to view it in the correct form on the blog.
If you amswer NO, then you are one who cannot think with reason and logic. You can leave this conversation now, because you are wasting your time reading this blog.
That being said, lets move on.
One well-known economist says that former President George W. Bush is to blame for the current economic crisis. Really? Just one?
"Nouriel Roubini, a New York University professor nicknamed "Dr. Doom" for his dour views on the economy, says that when President Obama came to power, he inherited a budget deficit of $1.2 trillion. When Bush came to power, the country had a surplus of $300 billion."
How did we get a $1.5 trillion change in our fiscal condition during Bush's time in office? Roubini lists five factors:
1. We cut taxes. (Hint - Remember this one)
2. We spent $2 trillion on two unwinnable wars. (Kinda a done deal on this one)
3. We doubled discretionary spending. Some conservatives originally aimed to "starve the beast" by cutting taxes in order to force future cuts in spending. But spending grew so out of control in Bush's term that no beast was starved, Roubini said. In fact, the beast was fed. (Hint - Remember this one)
4. We added entitlement benefits like the Medicare drug benefit.
5. We entered the largest economic and financial crisis ever, which caused a huge increase in the deficit through the "recession deficit" and the cost of bailing out the banks and financial institutions. (We remember this one from what we learned in the beginning)
Yeah, yeah, I hear you.... So Dan, Where are you going with this?
I thought you would never ask.
In recent history, we have seen Congress turn what has been a routine event, never heard of before by the average person, (Raising the Republican debt ceiling) to accomodate the governments ability to pay its debtors.
Whoooo, Whooooooooo, settle down, all you republicans, let me explain that last comment. Lets take a look at history:
Reagan (Republican) - Your hero - Debt and debt ceiling raising.
George Bush Sr. (Republican)- "Read my lips - No new Taxes" - Debt and debt ceiling raising.
Bill Clinton (Democrat) - See above - $300 Billion Surplus. THATS RIGHT - SURPLUS.
George W Bush (Republican) - $12.6 Trillion Deficiet - Raised Debt ceiling - economy crashes.
So...Quiet down republicans. In reality most of our current situation is the result of Republican spending and tax cuts, the rest is Obama spending money to trying to fix what you destroyed.
But enough with who is to blame. Quite frankly it does not matter. We have a mess and we have to fix it. Had the economy not tanked, we would not be in this situation. The combination of lost company revenue, companies closing there doors, and millions of people becoming unemployed and thereby not paying taxes, the governments income has been drastically reduced.
Side Bar Your Honor....Millions of people are currently unemployed due recession we previously established started in 2007 and ended in 2009. This is a fact. If George Bush and President Obama had not authorized the bailout money, Every american would have lost money due to bank failures on the national and local level. In addition Millions more people would be laid off... meaning much more loss of revenue and a conciderably worse decline in the recession. So the choices available were limited. Spend a Trillion $850 Billion Dollars (I think I said that right) on bailouts, or plummet into a Depression. Thats right, I said Depression not recession. Add to that that all of the money needed to be returned at 8% interest, the deal becomes an investment not a bailout. Incidentally Chrysler, GM, and most of the larger banks have repaid the loan at this time, with interest, so have you noticed, the concervative talk show hosts no longer say that president Obama was "Taking over these companies as part of a socialist agenda". They do still concider him socialist, which is rediculous if you know what socialist and marxist mean, which fortunatly for you I will cover in my next blog. You will be suprised.
SO how do you go about fixing a loss in revenue. Lets take a look at this from a household point of view. Lets say you have a house hold where both adults worked, and you lived confortably. You bought a house and a car, borrowing money to do so, maybe used a credit card or two, but you were making these payments comfortably. All of a sudden one adult is laid off. Now, you cant pay all of those bills. You can't even make ends meet on week to week necessities, so what do you do. Well you have two pretty odvious choices and one of them is NOT to sell the children. You either increase your income through another job, or you cut expenses. Wait a minute, there are three choices... You can also do BOTH. Everyone who has ever balanced a checkbook when times are tight knows, you can only cut so much, and then only increased income will do. After you loose the house to forclosure, and have the car repossesed, you will still owe a lot of debt and need to make ends meet.
Here is where all of the fuss begins. The government is a little different than most households at this point. The government can run a deficiet, sell its debt, and continue to run, where a family looses everything, so the analogy is not perfect,but you get the point. Our government has really just two options. They cut expenses (includes public employee layoffs), and/or raise taxes. Now remember one thing, when the government lays off people, they are not just reducing expenses, but also reducing revenue. Those who are laid off no longer pay income tax, so government employee layoffs are a double edged sword of sorts. They are however still necessary.
I think everyone can agree we have to make some expense cuts in order to bring down the debt. Some far right liberals may disagree, but the thought process which says we do not need to make some cuts is beyond reason and logic.
So, what are we left with. That would be taxes. Conservatives argue that tax cuts generate revenue for big business, business uses that money to invest and create jobs. Keeping that in mind, lets look at cutting taxes. George Bush lowered taxes in 2002, after the economy tanked from 911. Those tax cuts were in effect in 2007 when our economy tanked again under GWB. Did those tax cuts save jobs. Answer, of course not. Then we hear from a Billionare himself this last week - Warren Buffet. He says its time to increase taxes on the rich. He used himself as an example. he said he paid around 6.6 million in taxes last year, which sounds huge, but in reality it was around 17% of his wage, which I am guessing ended up being somewhere between 32 and 40 million. Now, if you are someone who makes 40 million dollars, are you going to be short on cash for paying 25% taxes, or 10 million dollars. Be Honest. You will not like paying 10 million dollars in taxes, but you are NOT going to say, " You know I think I am going to pass on making this investment which will make me $100,000 because I will have to pay $25,000 dollars in taxes. The $75,000 I would make just isent worth it because of the taxes." PLEASE! I guarantee you, that type of statement has NEEEVVVEEERRR been made by anyone. If there is money to be made, businesses and individuals will make it and gripe about the taxes later, but they WILLLL SPEND THE MONEY. Anyone who says different is either lying, or not rich because they don't understand how to money work.
Just this week there was a report about the largest companies out there are hourding over a trilloin dollars in liquid investable dollars, not because they do't want to make money, but because if they spend it now the economy will improve and they will loose leverage on getting congress to cut taxes. They are NOT staying away from regular money making investments, they are just waiting on hiring people and spending on capital expenses (Buildings/Land) which would immediately drive the economy forward. It is not as the conservatives would have you believe that they do not have the money, or are woried about the economy, because they have the power to improve the economy over night. They are just choosing not to as a barganning chip to get tax cuts. "WE THE CORPORATION!" Then they will invest the money they already have and it will look like cutting taxes rebounded the economy.
I propose to you today, that it is not the presidential policies, keeping the taxes low, or the spending cuts in congress which is holding back our economy. It is GREED. Corporate greed, plain and simple. "Wait a minute, was'nt it corporate greed in the banking and housing industry that caused our economy to tank in the first place?" Greed did cause it and greed is still holding us back. I see no reason to avoid raising taxes. If corporations will not take the initiative and spend to improve the economy, then let the government take a small portion of that money and do it for them....For us...."We the People".
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