A slightly off-center perspective on monetary problems.
It’s hard to believe how much damage Bush did to the US economy in 8 short years:
1. Massive increases in federal spending on education
2. Tax cuts without spending cuts.
3. A huge increase in the welfare state (Medicare drug benefit.)
4. A crackdown on immigration, especially high-skilled immigration.
5. A 40% jump in the minimum wage, right before the Fed squashes NGDP.
6. Massive increases in “defense” and “homeland security.”
7. Extended unemployment benefits.
And here’s one I forgot about:
The travel industry today became the latest to slam federal rules and bureaucracy, charging that tough visa rules for potential tourists have robbed the nation of $600 billion and hundreds of thousands of jobs.
Two grim facts: More Chinese now visit France than the United States, in part because it’s hard to get a U.S. visitors visa. And while the U.S. used to be the destination for 17 percent of the world’s tourists in 2000, that’s dropped to 12.4 percent and shows no sign of changing.
“Even as world travel grew by more than 60 million travelers between 2000 and 2010, the U.S. share of the market remained essentially flat. During this ‘lost decade,’ our economy squandered an opportunity to gain $606 billion in total spending from 78 million additional visitors"”enough to support 467,000 more jobs annually,” said a new report out this afternoon from the U.S. Travel Association.
And the policy fiascos continue under Obama, as evidence by news of the Keystone pipeline being killed today. (Officially delayed until after the election, but that means it’s effectively dead.) Remember when Clinton and the GOP Congress cooperated to deliver growth enhancing policies? It seems like a lifetime ago.
I expect smaller English-speaking countries to continue gaining ground on the US. They aren’t perfect, but they don’t continually shoot themselves in the foot.
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16 Responses to “A Bush league economy”
Keystone XL is a policy fiasco? Scott, do you not care about climate change?
What a disaster.
But remember, McCain would have been “Bush’s 3rd Term.”
If Bush had not done so much damage to the economy and the size of government, I would be willing to vote for a moderate Republican or Democrat that only had a few pet issues and otherwise left the status quo in place. Because I think things are so monumentally screwed, I don’t want to mess around with candidates that aren’t thinking of big fundamental reforms. (I think this dynamic has manifested itself in polls as increasing polarization.) It’s increasingly clear to me that Ron Paul is the only one who can deliver these big changes.
Romney is more of the same as far as I can tell; Perry continues to implode and his best appeal is vague reverence for small business; Cain is entirely one dimensional and his positions on foreign policy, trade, and immigration are frightening; Santorum is more of the status quo; Johnson isn’t even getting into debates; Huntsman sounds reasonable and moderate, but he is still lagging.
‘Keystone XL is a policy fiasco? Scott, do you not care about climate change?’
Oil usage is extremely inelastic. Increasing the price of oil doesn’t really lower its usage very much at all, while it does harm the economy quite a bit.
@ RJ
My above comment was directed at RJ.
i never really understood why Bush, and the equally complicit republican majority, did not get blamed for the massive increase in the federal footprint under his watch.
I hope the pipeline is not dead, just postponed. whats another year on a 7 Bn project.
Actually, the bush tax cuts didn’t really reduce revenues. I know, sounds crazy, but look at the numbers. In 2000, the US government collected a record 2 trillion and change. Between then and 2003 revenues fell to just under 1.8 trillion. That means the absolute maximum the cuts cost was 200 billion in revenue per year. The tax cuts were passed in 2 rounds that didn’t go into effect until 2002 and 2004, respectively. But revenues had fallen almost 50 billion a year by 2001, and between 2003 and 2004 they increased almost 100 billion, despite the second round of cuts. In 2005 revenues were 2.15 trillion, and in 2006 they were exactly the same percentage of GDP as they were in 1996, when the economy was performing similarly. And if you graph revenues vs. the trendline we’re back above it by 2006 as well. In short, the bush tax cuts did little to nothing to revenues, we have a serious laffer plateau effect going on.
RJ, I do care, and I favor a carbon tax to reduce coal consumption.
Cthorm, It’s crazy that Johnson isn’t getting into debates. He’s a former governor. Meanwhile we have all sorts of nutcases running for the GOP nomination.
Too bad Huntsman hasn’t gotten more attention–he’s probably the lesser of evils (excluding Johnson.)
dwb, If Obama’s re-elected, as I expect, it’s dead.
Cassander, I’m afraid I don’t buy that argument. But I agree that spending was the bigger problem.
In order:
‘1. Massive increases in federal spending on education’
Paltry as a per cent of GDP, probably had no effect on the economy at all. Though I think even one dollar is too much federal spending on education. Reagan couldn’t kill the DoE, it’s a little bit much to expect it from Bush.
‘2. Tax cuts without spending cuts.’
Tax rate reductions, you mean. I liked them. Maybe they contributed to the moderation of the 2001 recession. Also, see what Cassander said. By 2006 we were over historic average levels of revenue to GDP, and below average deficits.
‘3. A huge increase in the welfare state (Medicare drug benefit.)’
Baked into the cake. Would have been worse if Gore had been elected. Bush could have done nothing to stop it.
‘4. A crackdown on immigration, especially high-skilled immigration.’
Not too sure how severe the crackdown actually was, but it’s always been difficult for foreigners to get into the US. Remember the Ship of Fools?
‘5. A 40% jump in the minimum wage, right before the Fed squashes NGDP.’
Again, hardly Bush’s fault. Congress loves to pander to unions on this. And, many states do worse. It’s about to rise to over nine dollars in Washington state.
‘6. Massive increases in "defense" and "homeland security."’
Pearl Harbor had that effect too. Defense is still half what it was during Eisenhower’s peacetime years, and if Gore had been elected the Homeland Security employees would all be SEIU members.
‘7. Extended unemployment benefits.’
Again, the Democrats in congress would have been impossible to stop here.
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