The Economy

[kandrathe]

You don't just outspend your allies, behooving them to step up to the plate. You also vastly outspend your potential enemies. In sheer dollar terms (understanding that this is not the whole game) you could take them all on together, twice over.

I assume that is what the "peace through strength" strategy involves. Of course, it is also what leads the US to negotiate with bullets and appear to be a bully to the rest of the world. A position, we both agree is distasteful and probably untenable indefinitely.

And what I'm saying is that there are Democratic administrations (the Keynesian ones) that have made substantial strides towards that goal, only to watch them undone by subsequent Republican administrations (the not-Keynesian ones.) Blaming Keynesian ideas or their followers therefore makes less sense than the more obvious targets of blaming Ronald Reagan and ...

It's not quite that simple. Perhaps (from the Republican's POV) during Democrat tenure in office they ignore threats to national security to the point where it has fallen upon Republican administrations to "set the world in order" again. Standing from the outside (of D's and R's), it has actually become a silly game of tit for tat as each party sweeps into office, nullifying the former executives orders, and trying to implement special counsels to vilify the former leaders. As an L, my interest is that the US federal government perform its number one mandate, which is to defend the liberties of the citizens. So, I have less quarrel with my government going after 911 terrorists in Afghanistan, than I do with them handing out free prescription drugs to wealthy old people. Both are probably a misuse of tax revenue, although the former has some meter of constitutional authority.

George "Dubya" Bush, who cut taxes and raise spending at the same time. (Not to mention starting expensive wars of choice halfway around the world, all the while talking about how they'll pay for themselves...)

Of course, in the world of political double talk speech, it seems that way. I think I demonstrated in some detail (analyzing each quintile group) a few months ago how the "Bush Tax Cuts" actually raised taxes upon the wealthy. So, allowing them to expire actually helps the upper 2 quintiles, and hurts the middle two quintiles.

Let's look at some real numbers for the Dubya years (from the aforementioned Section 1, table 1.1) ...

Year __ Revenue ____ Expenses __ Deficit/Surplus
2000 __ 2,025,457 __ 1,789,216 __ 236,241
2001 __ 1,991,426 __ 1,863,190 __ 128,236
2002 __ 1,853,395 __ 2,011,153 __ -157,758
2003 __ 1,782,532 __ 2,160,117 __ -377,585
2004 __ 1,880,279 __ 2,293,006 __ -412,727
2005 __ 2,153,859 __ 2,472,205 __ -318,346
2006 __ 2,285,491 __ 2,708,677 __ -423,186
2007 __ 2,415,852 __ 2,770,097 __ -354,245
2008 __ 2,590,258 __ 2,813,592 __ -223,334

We must also consider that Clinton had to deal with a Republican Congress and Dubya had to deal with a Democratic one the last few years of his term. I see revenues dip sharply during the recession (tech bubble and 911), and expenses start to grow as Bush traded political support for legislative excess in exchange for support of his war efforts. I also see that revenues rise sharply from 2004 to 2008 (after the Bush Tax Cuts go into effect), and had the Keynesian's truly have been in power, they would have held the budget flat at around the 2002 level resulting in surpluses for the four years 2005 to 2008. From a Keynesian POV, wouldn't the increase in government spending during the Bush years contributed to the over stimulation of the economy?