Wednesday, October 7, 1998 |
If current polls are to be believed, I fear we are becoming the most ill-informed, ignorant nation in the world. There's a tendency among media types to blame ourselves, and we certainly have to shoulder our share of responsibility. But media outlets can't exist unless they give people what they want, and what they increasingly want is to feel good, not to be given the hard facts. The president's perjury scandal is the perfect example. People don't want to be bothered with the facts. The economy is OK, so it doesn't matter what else the president does. The economy went south during George Bush's watch, partly because of a tax increase he helped the Democrat-controlled Congress load onto the backs of the American people. The people reacted by ousting the president. People actually seem to think that the president runs the economy. I know I'm going to get letters challenging my credibility as an economics expert. Let me save you the trouble. I'm not an expert, just a guy who has been paying pretty close attention for 25 years. And if you pay attention, it's not all that complicated. The president and Congress can help or hurt the economy, slightly, in two ways: they can pass tax cuts or tax increases, and they can balance or fail to balance the federal budget. As much as I am an advocate of tax cuts, both of the above pale in comparison to what the Federal Reserve can do in raising or lowering interest rates. When interest rates go up, the economy slows down. When interest rates go down, the economy speeds up. I'm sure an economics expert could stretch that explanation over a couple thousand pages and charge you $75 for it in the college book store, but that's basically it. President Bush didn't deserve all the blame for the recession of the late '80s, though the tax increase certainly didn't help. And in that, he shares blame equally with the Congress. The president cannot pass a tax increase without the Congress. President Clinton has made it clear he will veto any attempt to let people keep more of their earnings, and in fact when he had a cooperative Congress he passed the largest tax increase in the history of the world. He also has fought tooth and nail against the Congress as it has worked toward a balanced budget. So on both counts, he has not participated in any activity that would have a positive effect on the economy. Therefore, he doesn't deserve the credit for how things are, though the polls indicate people are blissfully ignorant of that. Now it looks like things might get a little dicey, economy-wise. The stock market is floundering badly, and if it keeps that up, eventually people will react by slowing down their spending for goods and services. The economy will start slipping. If that happens and you look in this space for me to blame it on President Clinton, you will be sadly disappointed. Clinton, quite simply, has done nothing to affect the economy in any way since Republicans took over Congress. The slight positive effect that the government, outside the Fed, has had on the economy has all come from the Congress. With a few other breaks, a tax cut now might help avert the possibility of a downturn. But the president continues to promise that he will veto any tax cut, because he wants to use the so-called "budget surplus" to fund more and bigger government. If Congress passes a tax cut and the president vetoes it, I will blame him for stopping something that could help a little. But the bigger blame will go to the Fed for keeping interest rates too high, and to the economic turmoil in other nations where governments do exert greater control over business and industry. Look two paragraphs above and you will see yet another example of the ignorance of the American people. I bet if you asked 100 people, many of them haven't even watched enough TV news to know that there allegedly is a budget surplus. But among those who do, I'd bet that 80 percent of them actually believe it. There's no surplus. We're still spending more than we're taking in, though we've made marvelous progress. The president uses our big trust funds, such as the one for Social Security, to pump up the positive side of the equation and make it look like there's a surplus. All of that money is committed. It's not part of the general fund and shouldn't be counted. What's really bad is that the Republican Congress seems to be going along with the president in this deception. I'm preaching to the choir, of course. If you're reading this newspaper, you're probably better educated and more interested and involved in your city, your state and your nation than the average person nationwide. If our representative form of government is going to survive, more people are going to have to start following your example. If you have any ideas about how to make that happen, please move somewhere else. Then run for Congress.
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