Who manages the economy better

Dedman · Post by **Dedman** » Fri Feb 13, 2004 3:59 pm

I would like to take an informal poll. Who in your opinion manages the economy better Reps or Dems. By managing better, I mean practices more fiscal responsibility.

I am curious to see what everyone thinks. I will give my answer in a bit.

Herculosis · Post by **Herculosis** » Fri Feb 13, 2004 5:07 pm

Historically, Republicans have been more fiscally conservative (as well as conservative in general). Democrats now, however, are making the case that THEY are the more fiscally resonsible, pointing to two compelling pieces of data:

1. THEY balanced the budget under Clinton.

2. Bush not only blew the entire surplus, but has produced the largest budget deficit in history.

Regarding item 1, they are correct. Except for the fact that the congress majority was held by the Republicans during the time in question. More importantly, the "surplus" budget was the result of a booming economy, not anything in particular done by the administration OR congress. In hind sight, much of the "boom" was hollow, caused by the Internet bubble. Still more was fraudulent (Enron, et al). Probably the BIGGEST factor in allowing the Clinton watch to see a balanced budget was the Republican defeat of nationalized healthcare.

Regarding item 2, there never WAS an actual surplus. That was just a projection based on economic expectations. As far as the big deficit goes, the reasons are many:

a. We went through a recession. Revenue dropped significantly due to that.

b. Confidence in the markets, and in business in general took a HUGE hit because of Enron, Worldcom, etc.

c. 911 happened. The markets and economy in general took a huge hit here. Uncertainties have kept investment low, and the recovery slow. I for one lost HUGE in the market, and STILL haven't started any new investments. Many others are in the same boat.

d. We had, and are still having, 2 wars. For many of us, including the Bush administration, spending there is essential.

e. Tax cuts. I mention these because some will say they are THE cause of the deficit. Personally, I think they've helped the recovery along quicker than it would have progressed without them. So, one could make a case that the deficit COULD have been larger without them, all other things being equal.

f. Bush has pushed for some new big-ticket items, such as the prescription drug stuff. Part was due to his sense of the need for them, and part was political. He's clearly attempting to win some points among the elderly, and other swing groups. Democrats didn't like the bill, but theirs would have cost MORE.

Bottom line is, if you're going to try to build conclusions about fiscal responsibility based on the current and last administrations, I don't think you can. To be fair, you can only compare approaches and results in the same kinds of circumstances.

One thing I think you CAN say, though, is that whenever stuff "gets done" in government, we almost always end up spending more. Since we now have Republican control of both houses AND the presidency, some stuff is passing, and so we're spending more. The same would happen if everything was in control of the democrats. In that case, the defense part of the spending would likely be less, but the social part would be more. In addition, the tax cuts would NOT have happened, and the economy, as a result IMO, would probably be recovering slower than it is now.

Probably the best fiscally-prudent combination is a Republican congress, and a Democrat president. The second best is the reverse. At the moment, I'm not sure I'm willing to jepardize defense, though, to have a better bottom line.

Dedman · Post by **Dedman** » Fri Feb 13, 2004 6:37 pm

Dude I was looking for a one word answer. But thanks for the reply.

index_html · Post by **index_html** » Fri Feb 13, 2004 7:00 pm

When one party controls the White House and the other party controls Congress is when fiscal responsibility seems to be optimal. It's pretty telling that the Kennedy/Johnson and Bush II administrations top the list. Cato's got an article worth reading about it: http://www.cato.org/dailys/05-07-03.html

Good graphs here: http://www.cato.org/research/fiscal_pol ... sfigs.html

My one word answer: neither

DCrazy · Post by **DCrazy** » Fri Feb 13, 2004 7:19 pm

One thing I'd like to add to Herculosis' list is that the president doesn't control spending, the Congress does. People always seem to overlook this. Remember that for 50% of GWB's first term, the Senate was Democratically controlled. Most people don't understand this. They also, as H said, don't take into account the national economy, failing to realize that the government is a component of it, not ABOVE it. I'm sure there are plenty of Democratic presidents (and Republican ones for that matter) who had deficits that, if measured against the GDP of the time, were far worse than today's.

Birdseye · Post by **Birdseye** » Fri Feb 13, 2004 8:42 pm

NEITHER

Kyouryuu · Post by **Kyouryuu** » Fri Feb 13, 2004 10:43 pm

Neither party does a particularly brilliant job. No matter who is generally viewed as being more fiscally conservative, the two parties burn money in different ways. While democrats tend to support socialist programs, republicans tend to finance pre-emptive defense and military projects. It's really only when both parties have to butt heads (that is, when the House and Senate are in balance) when the best things happen. Then, neither party can advance its agenda and their usage of finance is subject to greater scrutiny.

bash · Post by **bash** » Sat Feb 14, 2004 11:35 am

Both, together. As has already been made clear, only when there is someone you have to make a deal with to get your money does spending remain focused on the necessities (and pork gets scrutinized more closely).

Will Robinson · Post by **Will Robinson** » Sat Feb 14, 2004 2:26 pm

What we need is to make congress pass all their budget legislation by Clark Howard. Do that and we will be fine.

Ferno · Post by **Ferno** » Sat Feb 14, 2004 3:49 pm

you mean there might be apolitician that knows how to manage money?

lol. i do a better job managing 1000 a month than they do for three trillion.

UZI · Post by **UZI** » Tue Feb 17, 2004 10:24 am

<BLOCKQUOTE><font size="1" face="Arial">quote:</font><HR><font face="Arial" size="3">Originally posted by Birdseye:
NEITHER</font><HR></BLOCKQUOTE>

Exactly. Managing the independent judgments (to achieve an expected outcome) that go into millions of transactions is something only communist party member even contemplate undertaking, and the only thing they ever do is destroy economic activity.