If Mitt Romney wins, the middle class loses

It seems you've bought into the left-wing narrative of GOP = bad, Democrats = good, and that the 90's were a golden age under Clinton while the Bush years have been a disaster. The chart below tells the real story, that Bush inherited a recession and the Bush tax cuts actually brought about a real recovery.



The dot-com bubble had burst in 2000 (under Clinton), and the economy was sinking even before 9/11, the corporate scandals, and Sarbanes-Oxley. Bush's original tax-cut proposal was designed in part as insurance against such a downturn. But instead of getting his tax cut when we needed it the most, to win over Senate Democrats, Bush phased in the tax rate reductions and settled for politically popular, but economically anemic, tax rebate checks. Those checks provided a short-term lift to consumer spending but no real boost to risk-taking or business investment, which was still recovering from the dot-com implosion.

By late 2002, the economy was still struggling to recover, which is when Bush proposed his second round of tax cuts. This time, the tax rate reductions were immediate, and they included cuts in capital gains and dividends designed to spur business incentives. As the tax cuts became law in late May 2003, the recovery began. Growth averaged nearly 4% over the next three years, the unemployment rate fell from 6.3% in June '03 to 4.4% in October '06, and real wages began to grow despite rising food and energy prices. The 2003 tax cut was the high point of Bush economic policy. As the chart below shows the 10 year unemployment figures from 1997 to 2007, you can see clearly that Bush inherited the Clinton recession and that the Bush tax cuts brought unemployment down.



So what lead to the economic crisis in 2008? While Bush was putting his tax cuts into effect in 2003 and seeing success, the Federal Reserve was pushing the monetary accelerator to the floor. In reaction to the dot-com implosion and the collapse in business investment, Alan Greenspan rapidly cut interest rates to spur housing and consumer spending. In June 2003, even as the tax cuts were passing and the economy took off, he cut the fed funds rate to 1% and kept it there for a year.

The money boom created a commodity price spike as well as a subsidy for credit across the economy. By pushing all of this excess credit into the economy, the Fed created a housing and mortgage mania that Wall Street was only too happy to be part of. Yes, many on the Street abandoned their normal risk standards. But they were goaded by an enormous subsidy for debt, along with Fannie and Freddie underwriting and buying loans that never should have been underwritten to begin with. Wall Street did feast at the public trough, but Washington and the Fed set the table and rang the dinner bell.

But it wasn't JUST Wall Street or JUST Bush, it was across the board: from homebuyers who put nothing down for a loan, to a White House that bragged about record home ownership, to the Democrats who promoted and protected Fannie and Freddie. Nobody wanted the party to end, but it had to.

The real culprit for the 2008 housing crisis was primarily the Fed's throttling of their monetary policy coupled with loose lending practices cheer-leaded by Fannie and Freddie. This history is crucial to understand. Bush did many things right after inheriting one bubble. But was ruined by monetary excess that created a second, more dangerous credit crisis. Bush forgot one of the main lessons of Reaganomics, which is the importance of stable money.

Obamacare's costs "will increase premiums in fully insured coverage markets by an average of 1.9% to 2.3% in 2014. bY 2023, the fees will ultimately increase premiums by an average of 2.8% to 3.7%. For small group coverage, this well on average increase the cost to cover an individual by about $2,800, and a family by about $6,800 over a 10-year period, beginning in 2014. . . .and that is just the cost of that legislation not normal increases because of the cost of doing business. . .that is just what the middle class needs right? No no no we need green jobs and $3.62 a gallon gas . . .no no wait an 8 % unemployment rate, crap the U6 is around 15%. . . I know the EPA will help us right . . after all Obama is creating all these green jobs . . .the utility MACT and other new rules will in effect cost up to 183,000 jobs from 2012-2020. By 2020, 1.4 million jobs could be lost on account of the ne EPA rules . . .yeah that's helping the middle class. . .higher energy, higher unemployment, and if he does not get of his but higher taxes . . .everyone got a cut with the Bush tax cuts . . .look up the IRS data and it's easy to see . . .but those will expire soon . . . the typical middle-income family with a median income of $63,366, would see its federal income taxes go up by $1,540 if the Bush tax cuts are allowed to expire. . .oops I am sure that helps said middle class as well . . .The average-middle income family in Alaska, which has a median income of $79,541, would pay nearly $2,000 more in federal income taxes in 2011 if the tax cuts expire. By contrast, the typical family in West Virginia, with a median income of $49,082, would pay about $1,300 more . . .are you feeling me middle class . . .sources tonumerous to mention . . . http://www.ncpa.org/, http://taxfoundation.org/. . . .etc, etc . . .but hey you get a free commerative mug and your picture with an Obama cut out at the next inaguaration . . .along with a very very large tube of KY jelly