Sunday, October 07, 2007

The Republican Collapse - New York Times

Well written but largely misguided by assumptions...
One chord he strikes that is common among all those who see the last 6 or 7 years as a republican wasteland... the huge budget deficits....

But they miss several things in their analysis..

1. The bubble burst under Clinton began a long tech slide that blew away any of the future surpluses the dems endlessly brag about under the same president.
2. The 9/11 attack killed off the rest of the economy in one fell swoop. It was the major intent of the terrorists who did it.
3. What would have been HUGE domestic progress with massive tax-cut-induced, free-flowing-revenue to the government and huge surplus funds making for an idyllic period of world history were WIPED out in one day.
4. To salvage the nation and the economy (of the WORLD) the USA (Bush) fired up MASSIVE government spending to flood cash into the economy through homeland security and to fight a war. THIS CASH FLOW pumped the whole economy in a Keynesian way - much as is the traditional method of Democrats. Add a couple of bad weather events and this task becomes even harder to accomplish. Sometimes even Republicans must turn to the Keynesian solutions when things get THIS bad.
5. The problem with the Keynesian solutions is that they tend to never come to an end ... and the spending never seems to stop (ie. government programs are expanded - entitlements go on forever and whole departments (homeland security) come into being and remain in place. But in THIS case and in others in history - there was no OTHER choice at hand. You must take the bad
with the good.
6. The massive influx of funds to the government because of the TAX CUTS (see above) were essential to keep the Keynesian solution funded -- so they never did more than "creep up" in their contribution to erasing the "9/11 - Bubble" deficit. But they ARE, amazingly, reducing the deficit - a little every year regardless of the Keynesian solution.

The deficit will be a political issue - blown up huge by the Democrats in their battle for supremacy. But don't you know - THEY would have done the same thing (spend money like crazy by the government) with less results because THEY would have also RAISED taxes and REDUCED the flow of revenue to the government (raised taxes stymie the private sector from which the taxes are flowing - and which has never been a concern of Democrats since their
intent seems to be to "control business" not "stimulate" it.

SO .. the article below has points to bear in mind .. about conservatives and the economy .. but one must look at the history of the last 10 years to fully appreciate the value of the Bush and Republican contribution to solving problems arising in the course of this time frame.
Vic Campbell
RE: Subject: The Republican Collapse - New York Times

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