Categorized | Opinion

The Great Recession Part 4: What We Did Right and What We Did Wrong

We begin Part IV in the Great Recession Series.

To read the rest in the series:

The Great Recession Part 1: Caused By Y2K – The Storm of the Century
The Great Recession Part 2: Y2K Fallout
The Great Recession Part 3: The Housing Bubble

So, blame it on Bush? Well, OK if it makes you feel better. But that would be inaccurate.

So, blame it on Barny Frank, or the Democrats in charge since 2006? Again, if it makes you feel better, go ahead. But you would be incorrect.

Clinton? Blame him? Are you kidding? Go ahead, but inaccurate. And Obama gets a free pass on starting this because he was not around.

Remember Part 1? Y2K? That’s your culprit. And unless you want to blame some pimple faced geek from the 1960’s who was only trying to save on RAM (computer memory) which was in very short supply back then, well, the only conclusion you can reach is no one is really to blame for causing the meltdown. It was inevitable.

Well, you can blame some people and corporations for playing a part in it all, but that is really a moot point.

So what could we have done? And who did things right and wrong?

First, the wonderful economy that Clinton and the Democrats like to take credit for was all Y2K. Nothing Clinton did caused that to happen.

Now, here’s something that is going to blow your mind. Clinton actually did something that probably kept the problem from being any worse than it is. But he did so accidentally.

What did he do? Ok. Here goes your mind again. He raised taxes! There. I said it. A Democrat raised taxes and the editor of Virginia Right! said it was a good thing. It is snowing and hell is freezing over.

How can a Republican say the Clinton tax increases were a good thing? Ok. My mind is still intact. Clinton’s tax increase slowed down the economy. As all tax increases do. Although he didn’t know the economy was about to turn into a runaway train, the increases helped to smother some of the growth.

But then he went and spent the extra revenue. Some managed to pay down the debt, but only because they couldn’t spend it fast enough. But he still managed to grow the government overall, so his accidental good deed was not a good thing overall.

What he should have done was increase taxes a bit more on the Y2K income, cut spending and paid down the National Debt. We had the opportunity and we let it pass us by. But nobody knew.

So, the 2001 recession and tax cuts Bush put through must be a problem, right? No. The tax cuts were absolutely needed at the time. And they did the trick. The economy recovered.

But shortly after that, the real estate bubble began to grow. Here is another bubble. We all know there are problems when these burst, so what could have been done?

Here I go again, tax it! Not to the point it is no longer attractive, but enough to slow it down a bit. And pay down the debt and cut government spending.

Please understand this is not meant to advocate general tax increases. Nor is it intended to do any more than absorb some excess money and pay down the debt, debt which we should never have done in the first place – Balanced Budget anyone? Targeted taxes until growth in the sector is no longer overheated, then drop them to normal.

If we didn’t have such a massive debt, these targeted tax increases should be accompanied by tax decreases in areas that are slower. Or cut income taxes. The point is not to bring in more money to the Federal Government, but to retire the debt and keep taxes down to a minimum.

But bubbles must be controlled.

Part 5 will examine what we can do get the economy back on track.

About Tom White

Tom is a US Navy Veteran, owns an Insurance Agency and is currently an IT Manager for a Virginia Distributor. He has been published in American Thinker, currently writes for the Richmond Examiner as well as Virginia Right! Blog. Tom lives in Hanover County, Va and is involved in politics at every level and is a Recovering Republican who has finally had enough of the War on Conservatives in progress with the Leadership of the GOP on a National Level.

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Tom White Says:

Nothing is more conservative than a republican wanting to get their majority back. And nothing is more liberal than a republican WITH a majority.

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