Anyone can do, as much blah blah, as he or she wants. But, let us just give a hard, cold look to major economic indicators in Bush era, without any bias. Just plain numbers:
1. Unemployment rate 2000 = 4.00% – 2009 = 9.3%
2. Real GDP growth 2000 = 3.7% – 2008 = -5%
3. Budget surplus / deficit 2000 = $236 billion (2.4% GDP) surplus – 2008 = $459 billion (3.2% GDP) deficit
4. Federal spending 2000 = 1,789,216 – 2008 = 2,901,861
5. National debt 2000 = 5,674,178,209,886.86 – 2008 = 10,024,724,896,912.49
Now, I am not even going to the more advanced and sophisticated analysis and indicators, which are even worse. I am just giving you real, hardcore, factual and undeniable numbers, on very commonly talked about aspects of economy. Just to remind you that 2000 was the year when Bill Clinton, a democrat and so called liberal, left White House and 2001 was the year when George W. Bush, a Republican and widely known far right conservative, took office. 2008 was the year when Bush left office and in 2009 Barack Obama, a democrat and so called liberal, took office. Please, note that U.S. fiscal year runs from Oct. 1st to Sep. 30. That is why the outgoing president presents the budget for next year. For example, George Bush presented budget for 2009 and Bill Clinton presented budget for 2001.
Now, let us compare the data from 2008-2009 to 2011-2012:
1. Unemployment rate 2009 = 9.3% (peaked at 10.9%) – 2012 = 8.3%
2. Budget deficit 2009 = $1,413 billion (bottomed at $1,293 billion in 2010) – 2012 = $1,327 billion
3. GDP first quarter of 2009 = -8.9% – First quarter of 2012 = 2.8%
4. Corporate equities = first quarter of 2009 = 5.0 Trillions – second quarter of 2010 = 6.8 Trillions
5. Pension fund reserves first quarter of 2008 = 9.9 Trillions – Second quarter of 2010 = 11.7 Trillions
6. Credit instruments = Fourth quarter of 2008 = 4.0 Trillions – Second quarter of 2010 = 4.3 Trillions
7. All other financial assets = First quarter of 2009 = 12.7 Trillions – Second quarter of 2010 = 13.4 Trillions.
I am not even including the data from Reagan / Big Bush era vs. Clinton era or Herbert Hoover era vs. FDR era, which shows similar contrasts between the Republican and Democratic administrations. This has already happened so many times in our history that it is now far beyond the chances of co-incidence. The decline of economy, recessions and even Depression, under Republican administrations and sharp recoveries and growth under Democratic administrations. The classic bias that we have and the ideological propaganda that we constantly hear from right wing extremists, makes us deny these historical facts or just make us, rationalize the data. But, if you take a deep breath and do a realistic review of this data, you can easily realize that this cannot happen again and again, just due to co-incidence or due to the existence of an economic cycle. Just for once, please, keep aside the personal bias and all the propaganda that you hear from corporate owned media and corporate lobbies owned politicians, and think. Please, tell me, if you accept the chance or co-incidence argument, why the Republicans always have bad luck and Democrats always have good luck? If you accept the economic cycle argument, why Republicans always get the bad part of cycle and Democrats always get the good part of cycle?
As a matter of fact this is neither chance or co-incidence nor economic cycle. These historical facts show that there is a sharp contrast in the policies of Republican and Democratic administrations and the results achieved by them.
Historically speaking, Republicans have always believed on trickle down economy. As per their beliefs, deregulate and provide maximum tax cuts to rich and wealthy people, and corporations. This will generate free markets and will provide incentives and money to the rich, which in turn will improve and increase the economic and business activity, and investment in businesses and economic activity, resulting into the job creation and better compensation for workers. Hence these policies can and will improve the over all macro and micro economic picture, resulting into lots of wealth generation and economic well being of every one.
Historically and factually, there have been some serious problems with the practical implications of these policies, versus the theoretical results. Actually, a very substantial amount of wealth generated by large and wealthy corporations and rich people, during this process, does not go into new investments, start-up, R&D, businesses or novel economic activity. Most of this just sits in banks as assets and their wealth grows. For example, U.S. non-financial companies are currently holding 2.1 trillion dollars in cash and liquid assets. This represents 7.2% of all companies’ assets. 261.98 billions is the amount with which U.S. companies’ net cash inflow beats the cash outflow, per quarter, right now. This is when, the country and nation, and as a matter of fact the whole world, desperately needs aggressive business investments and drastically increased business and economic activity, to fill up the employment gap. which is killing and crushing the people worldwide. But, these richest and biggest corporations keep sitting on this cash and liquid assets. Trickle down doesn’t work.
On the other hand, if you take into consideration the typical Democratic policies of strengthening and growing middle class, the money that goes to middle class is mostly spent and invested, right away. This spurs the economy, economic activity, business incomes and revenues, job creation and income growth.
We have a consumer based economy. If consumers have jobs, money and disposable income, they spend their money, comparatively very rapidly and at a much higher proportion, compared to the rich corporations and individuals. This spending improves the revenue, profits and cash flow of small businesses, which are the growth engines of our economy. Small and medium sized businesses are similar to lower and middle class people in their spending habits. A very large proportion of their incomes and profits, quickly goes into new investments, expansions and growth, badly needed for their survival in any competitive market. This creates jobs and lowers the unemployment rates. Since job market improves and there is more competition between employers to get and retain employees, the compensation rates and hence, the incomes grow. I think, this is one of the many selfish reasons, due to which big corporations favor Republicans governments. This is because, due to higher unemployment, during Republican administrations, big corporations can get and retain employees at much lower rates and can treat them anyway they want. It is during these days that the frequent response of your managers, in response to any and every compliant, is, “Thank God for having a job. If you don’t like it, you can leave it”.
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