Friday, January 22, 2010
Obama will follow Clinton's playbook after his '94 defeat
An article in today's Wall Street Journal talked about Clinton's comeback after the Democrats were trounced in the 1994 elections. I believe, without doubt, that this will become Obama's playbook for the rest of his term. That's bad for the economy, here's why:
"...Famously, of course, he [Clinton] left behind efforts to overhaul health care. Then, in 1995, Mr. Clinton went against his party's orthodoxy by embracing a plan to balance the federal budget. And in 1996, he moved against Democratic orthodoxy again, by embracing a plan for wholesale changes to the welfare system."
A technology boom at the time masked the real destructiveness of the budget balancing, which ultimately led to a collapse in private savings. (By definition, if the gov't runs a surplus, the private sector must run a fiscal deficit.) However, Obama has no technology boom. In fact, he has nothing supporting this economy with the EXCEPTION of gov't spending and he's about to cut that!