Red, White and BLUE
The democrats- The Blue people, have won control of congress. And people keep asking me, more being facetious than anything else, what it's like living in a blue state now. Well it's just horrible, everyday i wake up in physical agony and i want to vomit on the floor. No really i don't mind, but i thought i would clarify my conservatism in plain terms. I report, you decide- as the much beloved fox news would say.
Pretty much my belief in a free market place is where it begins. I know free market place, yadda yadda yadda, but to me it just makes more sense.
-Lets take the pension as an example. Much of the income tax of the wage earner is put into secured accounts, earning 1-2%(lower than inflation) interest per annum. This is the divied out to all the old folks, who no longer earn a wage. The blue people say this is fine, we will keep taxes high and take people's money away from them, and put it into these extremely low yielding secure accounts. And perpetually place the onus of a high tax on the wage earner , and then once you retire, you will be looked after. --a pension that wastes the earning potential of people's money. with essentially every dollar they take for pension, you get less than a dollar back, and you need a constant supply of wage earners to prop up the aging population.
-I prefer the Red approach, yep G. dubbya and his personal accounts, which the Blue people vehemently oppose. He says well, let's allow the wage earner to put their money into investments of their choice. Superannuation, and these investments yield above inflation interest, 8% on average, some managed funds getting an even higher unbelievable return. This allows the tax rate to be much lower, and it allows the poor old wage earner the control of his own money and actually getting a decent return on it. Now you might say well the key word is SECURE accounts in the blue approach, and what if the bottom falls out of the economy and you end up with negative growth in the personal accounts. Well 2 quarters of negative growth is a recession and 4quarters of negative growth starts to become a depression which is an economic situation characterized by rising unemployment, an excess of supply over demand, deflation, reduced purchasing power, contraction of general business activity and public fear.
And this is why a depression doesn't occur under the guidance of people like Howard and the other RED people, with his new workplace laws-- that spur on business activity, and keep unemployment low--for the fact that businesses aren't afraid of union action if employess are being unproductive- businesses will feel much more inclined to hire new employees, and the employees will have to be productive or lose their job. (people will say but there will be unnesessary sackings- if the business can't be productive than yes. And i would say to those sacked, get your resume together, and get another job because there will be more opportunity)
-anyway with the personal accounts/super, you take the burden of pensions away from the next gen of wage earners, and allow the citizens of your country to build wealth. So the pension becomes redundant.
-that is a brief overview of my thinking, it has been about four years since i did economics at university, and many of you will no doubt take issue with it. But a lot of people seem nonplussed over my political beliefs, so i thought i'd try to clarify, why i think the way i do. The whole free market place then extends into, free trade agreements and the like, bla bla bla.
posted by danielinamerica at 3:36 AM
7 Comments:
Ummmm Dan, I think the Great Depression happened under a Republican President: Herbert Hoover, and according to most reports, America's economy really hasn't been that impressive since Gerogre W Bush took over, as you can see from below, sorry if its a bit long
Our Fiscal Future
Debt Reduction Relative to GDP4
The national debt is the net amount of debt held by the federal government ($3.9 trillion in 2003).5 It increased under both administrations (in today's dollars). But under Clinton the debt rose more slowly and GDP rose faster than under Bush. The result is that the ratio of debt to GDP went down an average of 3.89 percent per year during the Clinton years, but has gone up an average of 0.94 percent per year during the Bush years.
Trade Deficit Reduction Relative to GDP6
The trade deficit increased during both administrations. It increased by 0.52 percent of GDP per year under Clinton and by 0.37 percent per year under Bush.7 This is one of two indicators where economic performance under Bush appears to be better than it was during the Clinton administration. But underneath that data is a less flattering story for the Bush years. The trade deficit grew at the rate it did under Clinton for two main reasons: because the first Bush Administration's recession had cut imports to an artificially low level, and because the economy was expanding rapidly. People were confident, so they were buying a lot of imported goods. Businesses were growing, too, so U.S. factories were importing materials to manufacture their products. Throughout this period, export growth was very strong. In the Bush years, the trade deficit has been a product of a different, and less healthy dynamic: U.S. exports have dipped dramatically relative to imports.
Employment
Jobs8
One of the most important measures of economic well-being is the number of people with jobs. The number of jobs in the economy increased 2.38 percent per year under Clinton, but it has decreased 0.17 percent per year under Bush.9 While it's clear that the economic downturn in 2001 was not Bush's fault, the sluggishness of the recovery is unprecedented in the period since the federal government began issuing detailed employment reports in the 1940s. There have been 1.7 million jobs created since September 2003, which may sound like a lot, but that number falls short of the 1.8 million jobs that must be created per year just to match population growth, and it falls far below the 3.7 million jobs that the administration predicted would be created when the president signed his 2003 tax cut into law.10 This slow job growth is largely attributable to both the failure of the administration's fiscal policies (which targeted tax cuts to stimulate savings rather than spending) and the failure of its trade policies (which have done a poor job of opening foreign markets to spur export growth, and have not created the conditions for an orderly decline in the value of the dollar, which would have helped ease the trade imbalance).11
Full-time vs. Part-time Jobs12
The change in the number of jobs does not provide a complete picture of employment in the U.S. economy. Not only did the Clinton years produce many more jobs than the Bush years have, but they also produced more full-time jobs compared to part-time jobs. This is an important indicator because in an economic slowdown many displaced and new workers resort to part-time work as a second-choice option. Granted, some people might prefer part-time work because they have children or attend school. But, overall, a decrease in the ratio of full-time to part-time jobs implies that a greater share of workers have less stable work with fewer benefits. The ratio of full-time to part-time work rose under Clinton by 0.11 percent per year, but it has decreased at an annual rate of 1.67 percent since the beginning of 2001. In fact, the ratio of full-time to part-time jobs has not only reversed direction, but as of September 2004 it has fallen below what it was before Clinton took office.
Jobs with Good Wages
The economic well-being of American workers is determined not only by whether they have jobs -- ideally full-time jobs with benefits -- but also by how well their jobs pay. This indicator is a weighted index based on the change in the number of jobs in different income quintiles under Clinton and Bush.13 A positive value represents job growth biased toward higher paying jobs, which reflects an upwardly mobile economy. A negative value represents job growth biased toward lower-paying jobs, which reflects a more downwardly mobile economy. The score of 4.70 during the Clinton administration means that the economy produced significantly more jobs in high-wage quintiles than in the low-wage quintiles. In contrast, the score of -1.0 during the Bush administration substantiates reports that new jobs created under Bush have generally paid worse than the jobs that have been lost. For example, from 2000 to 2003, the economy added 540,820 jobs in the lowest-wage quintile. Meanwhile, 451,440 jobs were lost in the middle quintile and 357,900 jobs were lost in the two highest quintiles.14
Americans with Health Insurance15
Since most working Americans with health insurance get it through work, changes in the share of Americans who have health insurance is another indication of the quality of jobs in the economy. Under the Clinton administration, the share of Americans covered by health insurance went up 0.12 percent annually. Under Bush, there has been a 0.55 percent yearly decrease. Even more striking is that 5 million more Americans were without health insurance in 2003 than in 2000 and 3.8 million fewer Americans had employment-based health insurance.16
Incomes
Productivity17
Productivity measures the amount of economic output that each hour of work produces. It is an important indicator of economic performance because high rates of productivity traditionally correlate with strong growth in living standards. The most accurate measure of productivity covers non-farm businesses. During the Clinton administration non-farm business productivity grew 1.83 percent per year. During the Bush administration, it grew by an average of 3.76 percent per year. This is one of the only bright spots in a period of otherwise lackluster economic performance, and it is a measure that suggests hope for the economy in the coming years. But it is important to note that the late 1990s saw both productivity growth and job growth, producing a double benefit for the economy. During the Bush years, productivity has grown while jobs have not. Whether the nation can maintain the robust levels of productivity growth we have enjoyed since 1996 depends in large part on whether we put in place the right policies, including investments in research and development, and the skills of the workforce; promotion of the digital economy, including high-speed broadband deployment; and fiscal discipline to keep interest rates low.18
Per Capita GDP19
Simply comparing the annual growth of GDP under each administration would be misleading, because the population continues to grow. Per capita GDP -- in other words, how much output there is each year relative to the total population -- is a more accurate measure. While per capita GDP rose 2.42 percent under Clinton, it has risen just 1.62 percent per year during the Bush presidency. In large part, this is because fewer people are working.
Median Household Income20
Median household income is the best measure of American families' well-being because it shows the true economic mid-point of the population. By definition, half of all households make more than the median, and half make less. (Average household income figures are bad measures of overall well-being, because a small percentage of very rich families can skew the picture, making everyone appear to be richer than they are.) Median household income has fallen an average of 1.15 percent per year under Bush. It rose an average of 1.65 percent per year under Clinton.
Poverty Reduction21
Poverty statistics are telling indicators of the country's economic health. The number of Americans below the poverty line fell 2.29 percent annually in the Clinton years, but has since gone up 4.33 percent annually in the Bush years.
Homeownership22
No economic indicator can embody the American dream in quite the same way as homeownership. Indeed, one of the successes that President Bush frequently points to under his watch is the increase in homeownership. But while the home ownership rate has increased 0.37 percent per year during the Bush administration, that is a slowdown compared to the average increases of 1.94 percent during the Clinton administration.
well dave you finally post when it gets political, and thankyou for copying and pasting half your fucking textbook, but the fundamentals still hold the same, the unemplyment rate is at an all time low,
- and thankyou for comparing administrations of american politics when i obviously made a basic assertion to the fundamental principals behind conservative politics, and only drew an example of private accounts to compare to g dubbya and contemporary politics. The basic fundamentals hold the same, behind a conservative fiscal management. Times change and g dubbya had found himself in a great time of challenge, so comparing figures to a previous president is arbitrary. Times change and so do the need for different policies. But allowing each citizen to control their own money is a freedom i endorse. As an economist i would hope you could understand the value of a free market place, as part of a global community.
Boys,
take it easy.
Fuck politics and depressions. After the ASHES the only ones who will be depressed ARE the entire English test team. Tresscothick has already gone home (soft).
Yep, and Warney loves BUSH.
The great depression, had a lot more to do with paying of war debts than faulty conservative economic policy(Hoover did the democrat thing, and tried to control it, which backfired). In england it was a labour government in power, so to blame left and right in this specialized case is assinine. Hoover raised taxes and after a market bubble in the late 20's he increased the regulation of industry-- all of these helped to cause the crash, and they are the complete opposite of the conservative economics and the opposite of what Bush did to get out of a recession that hit in 2001 caused by tech bubble, which was to cut taxes and let market forces determine market prices without intervention. This is proper conservative economics, and it worked.
this isn't an academic forum, and when a specialist posts and just plants figures without developing any thesis, or extrapilating any thoughts from it, all you are left with pointless exposition which doesn't fit in this forum, and it doesn't fit in the academice world either, an academic paper is worthless without continuing the ideas of the beginning thesis. A specialist posting should understand the nature of the forum, and fit it according. Such as when i bring up philosophy i don't go into hardcore Aristotlian nicomachean ethics, i give people outlines of the very basic tenets of introductory philosophy that are congruent with the point i am making.
the key behind conservative economic theory is sometimes put into practice more by the democrats than the republicans. It is not a 'side' that i am touting in my post, rather the core principles of conservative econmics, and why i believe in them. And in the perfect world, they are always in place. The principles of coservative economics takes time to imlement and a republican president has to take over from a democratic one, who has run in the opposite direction. This makes it hard to make comparrisons.
Oh look... here is a whole bunch of figures that support that support Bush's economy, i'm just going to plant them below and you can make of them what you will:
Since 2003, when the Bush tax cuts went into effect, the economy’s growth rate has been better than the average of the 1980s and 1990s.
The current economic growth rate for 2006 is 3.5%
The average economic growth rate for the 1990s under Clinton was 3.3% and this was during the irrational exuberance of the dotcom bubble.
The average economic growth rate for 1980s was 3.1%
If the Democrats take control and eliminate the Bush tax cuts and raise taxes, economists predict this will slow the growth rate for the economy.
Here’s another “story” the Democrats are telling.
Democrats say that the Bush tax cuts reduced federal tax revenue and they will eliminate the Bush tax cuts and increase taxes to increase federal revenue.
The truth...
For fiscal year 2006, federal revenue as a share of Gross Domestic Product was 18.4%.
The post 1962 average for federal revenue was 18.2% of Gross Domestic Product.
The federal budget deficit for 2006 was $247.7 billion.
This represents 1.9% of the Gross Domestic Product which was 13.1 trillion dollars.
That is below the average for the 1970s, 1980s, and the 1990s.
The deficit as a percentage of the Gross Domestic Product for 2006 was 1.9%
The deficit as a percentage of the Gross Domestic Product for the 1990s was 2.2%
The deficit as a percentage of the Gross Domestic Product for the 1980s was 3.0%
The deficit as a percentage of the Gross Domestic Product for the 1970s was 2.1%
Economists state that Democratic tax increases will reduce federal revenue and increase the deficit as a percentage of Gross Domestic Product.
In addition, the Democrats don’t want you to know that the current unemployment rate which is 4.6% is lower than the average for the 1990s which was 5.8% and lower than the average for the past 40 years at 6.0%.
Don’t be buffaloed by democrat “stories”. Get the facts for yourself.
The Bush economy is doing quite well
Gas Prices Have Fallen 80 Cents Nationwide Since Early August
The Dow Set All-time Record Highs On Three Consecutive Days This Week.
Inflation remains low
Interest rates remain low
The President's pro-growth policies helped to strengthen our economy and create 6.6 million jobs in the last three years.
Real After-Tax Income Has Risen 15.0 Percent Since January 2001.
Real after-tax income per person has risen by 9 percent since January 2001.
The US homeownership rate reached a record 69.2 percent in the second quarter of 2004. The number of homeowners in the United States reached 73.4 million, the most ever. And for the first time, the majority of minority Americans owns their own homes.
I know fuck all about politics and the economy but i thought i'd have my say
"But allowing each citizen to control their own money is a freedom i endorse" My personal view is that people are idiots and if left to themselves will no doubt blow their money on magic beans, i see myself as a reasonally smart guy but i have no idea about investing and the such so i think thats got to be a general consensus.
"Gas Prices Have Fallen 80 Cents Nationwide Since Early August"
In perfect timing for the elections. Also the prices are virtually the same now as they were 10 months ago.
the perfect free market place has no corrupt politicians, who according to your conspiracy theory are altering the price of gas.
And if you are not happy with a super fund manager, investing the money; a system could be worked out with government advice, for those who aren't comfortable with that idea to invest in secure bonds or other secure investments with a lower yield than a managed fund, yet still higher than inflation. Just because someone is stupid with their money, shouldn't place the onus on other wage earners.
i like that about the magic beans,as making an irrational decision. but that is what i feel the government is doing right now, taking money away from people and investing it stupidly, and because of that they constantly need new wage earners to prop it up. It is econmocially irrational for them to make such stupid investment decisions on the money they take away from the wage earner. Super needs government control, which it has to an extent now, and a certain amount of wage is automatically put into super funds,which require no intelectual no how. And i would rather have the wage earner have a tax dollar back than have it lost toeconomically rash decisions. It would maximize every dollar, and even after super leave more money in the hand of the wage earner, to go and spend and make the economy strong.
-And that is just where you can differ in belief on point of socialism.
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