Obama: Like Clinton '92 or Clinton '93?
When Bill Clinton became president in 1993, he famously dumped his "Putting People First" investment agenda in favor of deficit reduction in hopes of lowering interest rates. Might a President Barack Obama do the same? (This is the secret fear of many left-of-center folks on my speed dial.)
Although Obama has ambitious—and pricey—clean energy and infrastructure spending plans, he will also probably be facing a $500 billion-plus budget deficit, more than double what government economists were predicting when Obama announced his candidacy in early 2007. I asked my pal Jared Bernstein—a Friend of the Blog, informal Obama economic adviser, and author of the must-read Crunch: Why Do I Feel So Squeezed?—what he thought Obama would do. Bernstein made a few points to me, speaking purely for himself:
1) Obama will most likely be facing an economy that's far weaker than the one Clinton faced. So pro-growth government investment will be an important policy.
2) Even though infrastructure spending gets criticized for being too slow to help the economy in the short term, Bernstein believes there are plenty of underfunded, ongoing state projects in play so that dollars from Uncle Sam would get spent quickly.
3) The Clinton economic boom may have started even earlier had he focused more on his campaign agenda and less on deficit cutting. Bernstein notes that while Clinton inherited a growing economy, unemployment stayed relatively higher until early 1994.
Me: I don't completely agree with Bernstein's economic analysis, but I think his political analysis is dead on. Obama is going to pursue the PPF agenda that Candidate Clinton advocated but that President Clinton pushed aside. (Sorry, deficit hawks.)
Now let me add that there are some smart folks I talk with regularly who think that with a half-trillion-dollar budget deficit looking him in the face, plus maybe another half a trillion in borrowings to finance a massive banking bailout, nervous bond investors will force Obama to employ his own version of Clinton's bond market strategy. But note that one guy pushing Obama to jack up government spending to boost the economy is superstar bond manager Bill Gross.
Tags: economy | presidential election 2008 | Barack Obama | Bill Clinton | federal deficit
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Reader Comments
Clinton was never about deficit reduction...
The deficit was ended by the republican congress, the end of the cold war, and the IT revolution led by Microsoft. Clinton had NOTHING to do with it.
His retro-active tax increase led to the downturn that hit during the last year of his administration.
During his campaign, he was for a middle class tax cut and sanctions against China. Both lies.
The underpining of the 90's prosperity included the Reagan tax cuts, the break up of AT&T - making possible the internet and the ending of the cold war so military money could be funneled into social programs.
Bill Clinton Was A Bewildered Bozo
Bill Clinton Was A Bewildered Bozo
To this day Bill Clinton and his equally bewildered fans still don’t understand, appreciate, and much less admit that House Speaker Newt Gingrich ran the US government and economy from 1995 until Newt retired in 1999 leaving the strongest economy in American history in terms of net annual growth.
These realities were brought directly about by the federal budget surplus that Gingrich engineered and got Congress to pass. From the start Clinton vociferously opposed all of Gingrich’s selfless and most wise efforts at every opportunity and then tried to take credit for all Newt’s incredible achievements after the fact.
There is no debate or even a discussion about any of these realities among professional economists.
What astonishes me is that there are still Americans who believe that Clinton was an adequate leader. Bill Clinton was a bewildered yet arrogant Bozo leader and remains a joke of a man.
God bless you
God bless America
America bless God
Vincent Mountjoy-Pepka
Author: Eloquence: The New Economics
Democracy For Americans
Risky Options
a bad dream
If I awake in the fall to the horror of Obama as President my first thought would be to rely on the congress to dilute his socialist fantasies. Then I would be forced into the realization that Pelosi and Reid will never be offsetting voices of reason. What would Obama be able to push through with a democrat congress? I shudder at the thought.
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