By Manifesto Joe
Who were the last two U.S. presidents to deliver balanced federal budgets? Answer: The last one was Bill Clinton. Before him, you have to go all the way back to fiscal 1968-69 -- that one was Lyndon Baines Johnson.
Yep, it was those "tax-and-spend" Democrats who did this. During the years in between, and since, we've seen what happens when government spends, but doesn't adequately tax. The debt piles up, like it did under Ronald Reagan and Il Doofus.
The Republican talking point about this is that the Clinton surplus is supposed to have been solely the result of the dot-com bubble of the late 1990s, which created a spike in income tax revenues because of overvalued Internet stocks. The bubble certainly helped Clinton, but saying that it was the only reason for the increased revenue is denial of history.
Here's a link to an article on the subject at FactCheck.org. Even when the accounting excludes the Social Security surplus, Clinton delivered two balanced budgets, including one with an $86.4 billion surplus (with Social Security included, that would be $236.2 billion).
The article states:
The Clinton years showed the effects of a large tax increase that Clinton pushed through in his first year, and that Republicans incorrectly claim is the "largest tax increase in history." It fell almost exclusively on upper-income taxpayers. Clinton’s fiscal 1994 budget also contained some spending restraints. An equally if not more powerful influence was the booming economy and huge gains in the stock markets, the so-called dot-com bubble, which brought in hundreds of millions in unanticipated tax revenue from taxes on capital gains and rising salaries.
So yes, the dot-com bubble was a big factor. But it's like poet Charles Bukowski said about luck -- that counts, too.
Notable here is that the Clinton economic plan, which the House passed in 1993 by a single vote, raised the top marginal income tax rate to 39.6%. I was a middle-income taxpayer during those years, and the effect of the Clinton plan on my taxes was almost nil. Rich people were, for a change, forced to pay something closer to their fair share for the upkeep of society.
Since President Obama has had a struggling economy to deal with since Day One (thanks so much, Il Doofus) letting tax rates return to the Clinton-era levels wouldn't come even very close to balancing the current budget. Obama has been a hard-luck SOB who inherited the biggest mess anyone has faced since FDR. And unlike FDR, he didn't have a 3-to-1 majority in the Congress, and fickle voters cost him a majority in the House last year.
Now, of course, he's being kicked around from two directions -- from the right, by lunatics who can't decide whether he's a socialist or a Nazi, and from the left, by those who would rather have had him fight losing battles for the public health-care option and for a more genuine compromise on the debt-ceiling issue. It's not hard to understand Obama's critics on the left, but if he'd done what they apparently wanted him to do, we'd have no health-care changes coming at all, and the economy would REALLY be in ruins.
But, I digress -- back to Clinton and his budgets. The basic lesson here is that all governments, any governments, must have adequate revenue in order to function. In 30 years, the U.S. economy has doubled in output, but wages and salaries for ordinary workers have stagnated. It's the superrich who have reaped the benefits (and they didn't even use a gun). And their tax burden has been dramatically reduced.
Bill Clinton wasn't my ideal as a president (nor is Obama). I reluctantly voted for Clinton twice. I opposed NAFTA, which he and Al Gore delivered up for our Corporate Masters. Clinton also signed off on deregulation of financial markets that proved disastrous, and that even he now admits was a mistake. And, I'd say the jury remains out on what Molly Ivins always called "welfare deform," which Clinton also signed.
But in politics, one often has to hold one's nose and take what one can get, and in the 1990s that was Clinton. Warts and all, I'd rather have him in charge than Il Doofus or Reagan, any day.
Letting tax rates revert to Clinton-era levels would just be a start. Right now, with conditions as they are, balancing the budget would require closing a lot of loopholes, plus a top marginal rate of, say, 49%. I think we've seen, judging from the long-term record of supply-side policy, that such a move would have little negative impact on job creation.
But the reality is that the Tea Party has great power in the House of Representatives, and the economy remains in the tank. Putting Obama over for a second term is far from certain. If we emerge in 2013 with a Republican president and both houses of Congress under that party's control, prepare for the worst. We'll likely see deep cuts in Social Security and Medicare -- and yet there will still be huge deficits, for years to come.
Manifesto Joe Is An Underground Writer Living In Texas.