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         History lesson/refresher from the late 1990's. The 1993 Clinton Tax levels were predictably predicted  by the GOP as the end of the world world as we knew it.

   Rep. Newt Gingrich (R-GA), February 2, 1993: We have all too many people in the Democratic administration who are talking about bigger Government, bigger bureaucracy, more programs, and higher taxes. I believe that that will in fact kill the current recovery and put us back in a recession. It might take 1 1/2 or 2 years, but it will happen. (Congressional Record, 1993, Thomas)

    Rep. Bill Archer (R-TX), May 24, 1993: I would much rather be here today supporting the President and I would do so if his proposals could expect to increase jobs and the standard of living for Americans, but I believe his massive tax increases will do just the opposite. (Congressional Record, 1993, Thomas)

    Rep. Bob Goodlatte (R-GA), July 13, 1993: Small businesses generate the bulk of this Nation’s new jobs . And they will be the hardest hit by the Clinton tax-and-spend budget. Because, when you raise taxes, you kill jobs. (Congressional Record, 1993, Thomas)

    Rep. Thomas Ewing (R-IL), February 21, 1993: The Clinton plan will hurt the economy and kill new job creation…By crippling small- and medium-sized businesses, the plan will kill jobs. (Congressional Record, 1993, Thomas)

    Rep. John Kasich (R-OH), August 5, 1993: Do you know what? This is now your package. We will come back here next year and try to help you when this puts the economy in the gutter. And virtually every major economic estimating firm in this country says your bill is going to kill jobs. (Congressional Record 1993, Page: H6249)

    Rep. Robert Dornan (R-CA), August 5, 1993: The problem with our economy is that there is too little employment and too little growth. This plan will do nothing to improve that condition and will actually make it worse. (Congressional Record, 1993, Page: H6148)

    Rep. Christopher Cox (R-CA), May, 27, 1993: This is really the Dr. Kevorkian plan for our economy. It will kill jobs, kill businesses, and yes, kill even the higher tax revenues that these suicidal tax increasers hope to gain. (Congressional Record, 1993, Page: H2949)

    Rep. Jim Ramstad (R-MN), March 17, 1993: These new taxes will stifle economic growth, destroy jobs, reduce revenues, and increase the deficit. Economists across the ideological spectrum are convinced that the Clinton tax increases will lead to widespread job loss. (Congressional Record, 1993, Page: H1355)

    Rep. Phil Crane (R-IL), March 18, 1993: The budget proposal offered by the Democrats is a recipe for economic and fiscal disaster…It proposes to increase taxes at a time when we have a fragile economy–higher taxes will only stifle job creation and economic growth.(Congressional Record, 1993, Page: H1454)

    Rep. Dick Armey (R-TX), August 2, 1993: The impact on job creation is going to be devastating, and the American young people in particular will suffer a fairly substantial deferment of their lives because there simply won’t be jobs for the next two to three years to go around to our young graduates across the country. (CNN)

    Rep. Joel Hefley (R-CO), August 4, 1993: However Clinton wants to spin his tax plan, the bottom line is this: It will raise your taxes, increase the deficit, and kill over 1 million jobs. (Congressional Record, 1993, Page: H5745)

Well as far as an reasonable metrics are concerned we were fine. Started paying down the National Debt and we got down to 4% unemployment. Revisionists from the right say that it caused the Bush43's 1st recession. Well uh no. Two other things happened and please do chime in if you wish to dispute. The Internet Bubble and The collapse of LTCM

"The Internet Bubble" Wiki defines it as follows and I bring it up in the context of Facebook's recent public offering.

http://en.wikipedia.org/...

The dot-com bubble (also referred to as the Internet bubble and the Information Technology Bubble[1]) was a speculative bubble covering roughly 1995–2000 (with a climax on March 10, 2000, with the NASDAQ peaking at 5132.52 in intraday trading before closing at 5048.62) during which stock markets in industrialized nations saw their equity value rise rapidly from growth in the Internet sector and related fields. While the latter part was a boom and bust cycle, the Internet boom is sometimes meant to refer to the steady commercial growth of the Internet with the advent of the world wide web, as exemplified by the first release of the Mosaic web browser in 1993, and continuing through the 1990s.

The period was marked by the founding (and, in many cases, spectacular failure) of a group of new Internet-based companies commonly referred to as dot-coms. Companies were seeing their stock prices shoot up if they simply added an "e-" prefix to their name and/or a ".com" to the end, which one author called "prefix investing".[2]

A combination of rapidly increasing stock prices, market confidence that the companies would turn future profits, individual speculation in stocks, and widely available venture capital created an environment in which many investors were willing to overlook traditional metrics such as P/E ratio in favor of confidence in technological advancements.

The collapse of the bubble took place during 2000-2001. Some companies, such as Pets.com, failed completely. Others lost a large portion of their market capitalization but remained stable and profitable, e.g., Cisco, whose stock declined by 86%. Some later recovered and surpassed their dot-com-bubble peaks, e.g., Amazon.com, whose stock went from 107 to 7 dollars per share, but a decade later exceeded 200.

Ok now LTCM. LTCM was a hedge fund operating out of Connecticut. Using super advanced computer models. Hummed along like Swiss watch. Asian and Russian Markets tanked. Swiss watch started sounding like Swiss Electric Guitar. Well the Fed called in the major players in

http://en.wikipedia.org/...

-----------snip-------------
Long-Term Capital Management did business with nearly everyone important on Wall Street. Indeed, much of LTCM's capital was composed of funds from the same Financial Professionals it traded with. As LTCM teetered, Wall Street feared that Long-Term's failure could cause a chain reaction in numerous markets, causing catastrophic losses throughout the financial system. After LTCM failed to raise more money on its own, it became clear it was running out of options. On September 23, 1998, Goldman Sachs, AIG, and Berkshire Hathaway offered then to buy out the fund's partners for $250 million, to inject $3.75 billion and to operate LTCM within Goldman's own trading division. The offer was stunningly low to LTCM's partners because at the start of the year their firm had been worth $4.7 billion. Warren Buffett gave Meriwether less than one hour to accept the deal; the time period lapsed before a deal could be worked out.[23]

Seeing no options left the Federal Reserve Bank of New York organized a bailout of $3.625 billion by the major creditors to avoid a wider collapse in the financial markets.[24] The principal negotiator for LTCM was general counsel James G. Rickards.[25] The contributions from the various institutions were as follows:[26][27]

    $300 million: Bankers Trust, Barclays, Chase, Credit Suisse First Boston, Deutsche Bank, Goldman Sachs, Merrill Lynch, J.P.Morgan, Morgan Stanley, Salomon Smith Barney, UBS
    $125 million: Société Générale
    $100 million: Lehman Brothers, Paribas
    Bear Stearns declined to participate.

In return, the participating banks got a 90% share in the fund and a promise that a supervisory board would be established. LTCM's partners received a 10% stake, still worth about $400 million, but this money was completely consumed by their debts. The partners once had $1.9 billion of their own money invested in LTCM, all of which was wiped out.[28]

The fear was that there would be a chain reaction as the company liquidated its securities to cover its debt, leading to a drop in prices, which would force other companies to liquidate their own debt creating a vicious cycle.

This left the Major players short on cash for bonus season..

So I'd love to hear a theory that the Clinton Tax cuts caused LTCM or a Dot com with a bogus/non-existent business model to fail....

So Ends the history lesson. Thoughts?

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Comment Preferences

  •  Tip Jar (5+ / 0-)

    Doctor Mitt Romney Brain Sturgeon-The Operation was a success but the patient died, where's my fee?

    by JML9999 on Sun May 20, 2012 at 05:00:06 PM PDT

  •  High Debt Levels Of Reagan/Bush I Era (1+ / 0-)
    Recommended by:
    JML9999

    Were being lowered by the end of the Clinton Administration through growth and the higher tax rates on the wealthy. High debt levels of Depression and WW II were being lowered in subsequent years by  growth and  high tax rates on the wealthy.

  •  You missed 1997 Clinton tax cut for investors. (0+ / 0-)

    The most important tax rate for most large investors is the capital gains rate.  In 1997, Clinton signed into law cutting the long term capital gains tax rate from 28% to 20% which is a 29% reduction.  If one is to honestly discuss tax rates during the Clinton years, this must be included.

    The budget surpluses only occurred after this lower tax rate was in effect, and the lowest unemployment rates occurred after this as did the real increase in income for the non-rich.  In addition, taxes collected from capital gains taxes were higher after this rate cut than in the year before.

    The most important way to protect the environment is not to have more than one child.

    by nextstep on Sun May 20, 2012 at 05:44:10 PM PDT

  •  You forgot to mention (0+ / 0-)

    that along with the increases to the marginal rate and the cap gains rate, Clinton limited the deductions that the wealthy could take, resulting in a significantly higher effective rate on upper income taxpayers.

    "A lie is not the other side of a story; it's just a lie."

    by happy camper on Mon May 21, 2012 at 05:33:01 AM PDT

  •  You could also include (0+ / 0-)

    the Asian Currency Crisis of 1997-98.
      So much money was pulled out of east Asia that it had to go somewhere, and that somewhere was American markets. Thus it provided the fuel for the internet bubble.

    Callate o despertaras la izquirda! - protest sign in Spain

    by gjohnsit on Mon May 21, 2012 at 06:44:14 AM PDT

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