History Forum / General / General Topics / August 2004

As usual a rightard oversimplifies life..

The dot com bubble affected only a relatively small segment of the economy.
Most losses were paper, and the employment losses, while significant in some
regions (like California) were not larger than other industry shakeouts.

9/11 had a short term effect, but properly handled it should have been a
positive economic influence by now,  With _proper_ increases in security
spending, such as funding first responders, building and inproving roads,
rail, ports, airports, and other facilities, and new security hiring the
economy would have been given a boost.

State budgets were strained. State tax revenue had been hit hard, with many
states cutting spending to avoid deficits. AS predicted, the welfare block
grant system coupled with rapidly increasing  medical and prescription
medicine costs  put huge loads on states to fund medicaid and other welfare
programs, despite decreased roles.

And the slowdown in the world economy didn't help.

But Bush blew it. Blew it big time. Rightard ideology got in the way of
proven economic principals. Bush's response was a meaningless tax decrease
of $300 for most Americans, and a huge tax decrease for the wealthy. Tax
decreases have little short  term effects on the economy
(www.ksg.harvard.edu/news/opeds/2004/bator_tax_cuts_ft_040604.htm), so the
downturn worsened while the stimulant effect (if any) of the tax decreases
worked their way through the system. Economic history suggests increased
governemnt spending on public works is an immediate postive influence on the
exconomy. WE got a double whammy here as states continued to cut budgerts,
delaying infrastructure projects and implementing hiring freezes. The
acknowledged long term negative impacts of these tax cuts (i.e, the deficit
and debt), are also discouraging economic growth.

Bush ideology also lost any chance to recover from 9/11. Instead of dealing
with Afghanistan and strenghtening the US internally, Bush decided to spend
100's of billions on a war with Iraq and a military buildup. The disruption
to the economy of having so many National Guardsmen  on active duty for so
long has slowed productivity gains and, for some companies, postponed
expansion. Spending initiatives such as star wars and other missile defense
programs have no spillover effect on the civilian economy. More billions are
going offshore t o support coalition members and for troop support. ( Add
the millions Halliburton is stealing or misspending).

No, the current soft economy is a direct result of Bush initiatives. WE
shoulld be worrying about the ecopnomy overheating by now, looking at
interest rate hikes and labor shortages. Instead, we _still_ have a net loss
of jobs, the stock market is about even with it's value three and a half
years ago, poverty has increased, lack of health care is up, real wages are
down, lenght of work week is flat to down, and interest rates are still in
the stimulus range.

Larry