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November 22, 2004
It Is the Economy Stupid, But It's a Bit More Complex
Of course, we know the economy runs in cycles...2001 was a year we were due for a slight recession..which is what we got. The so-called surpluses were not actually there to begin with. They were merely projected surpluses ONLY if the stock market kept up its record pace. The stock market did not, however, stay strong...it collapsed to some degree, and that had nothing to do with any president or any policy. The terrorist attacks also hit the market hard.
So, no matter what any president did, these factors came into play, and the PROJECTED surpluses would have never actually been surpluses in real dollars.
Outside of this- a surplus itself means just that- the government has taken in more tax revenue than they needed. Many (especially among the left) wanted the surplus saved for spending purposes, an idea that makes little sense, considering it's our money and frankly needs to be returned to the taxpayer. If you overpay for an item, you would, of course, want the money you paid over given back to you. The same thing should ring true with taxes. I think most people, left and right, feel that they should get their hard earned money back. Then again, as I said, there never was any surplus, only a projected surplus given a number of factors that had to stay the same, but didn't and had very little chance of doing so.
Why, then, does President Bush get blamed for the economy at all? We all know that president have very little power to control the economy...Congress, of course controls that much more, since they're the ones who actually spend tax money. The overall economy, tho, is basically regulated by the consumer and business. Everything runs in cycles, and the economy will continue to run like this. People have different overall moods toward the economy- the economy wasn't truly booming in the 90's (at least not the way most people think), because much of the money pumped into the economy was never actually real money. You had numerous companies paying out obscene amounts of money to everyone and their brother to start an internet startup- which eventually meant that the government had more tax reveune, but that tax money was soon spent (the actual money, not the projected money)...these facts along with the record low prices of crude oil (remember in some areas when a gallon of gas was 80 cents?) meant that things looked better than they were as well. But, crude oil prices in the 90's were well below what they should have been. Oil was insanely underpriced for many years, and that lends to the belief that things are better, cheaper, easier than they really are and really should be. When oil prices rose back to a normal level, and it was no longer wildly underpriced, things looked like they suddenly got a bit worse on the surface.
Many factors work to affect the actual economy and the average Americans SENSE of the economy and what the state of the economy is. But, we need to realize that the much talked about surpluses never really existed in real money, and only a miracle would have allowed the projected surpluses to turn into real money that could have been spent on any number of things. Also, with these facts, you realize that Bush is not to blame for the economy today, which is actually very good (better than the avg of the 70s, 80s, AND 90s), and that the late 90's were a completely abnormal phenomenon.
Posted by Josh at November 22, 2004 02:38 AM