By The Right Scoop


Carney said yesterday that despite claims of “economic Armageddon” in 1993 over Clinton’s tax increases on the wealthy, America saw “the longest peace time expansion of the economy in history” with “23 million jobs created.” He also said “the middle class saw its position made more secure – middle class incomes actually went up” and that “millionaires and billionaires did pretty darn well”:

But that’s not true according to Forbes contributor Charles Kadlec. First he notes what Clinton passed in 1993:

The 1993 Clinton tax increase raised the top two income tax rates to 36% and 39.6%, with the top rate hitting joint returns with incomes above $250,000 ($400,000 in 2012 dollars). In addition, it removed the cap on the 2.9% Medicare payroll tax, raised the corporate tax rate to 35% from 34%, increased the taxable portion of Social Security benefits, and imposed a 4.3 cent per gallon increase in transportation fuel taxes.

Kadlec says these tax increases were so unpopular that the Republicans won both the House and Senate in the historic elections of 1994:

Yet, in the 1994 elections, the Democratic Party suffered historic losses. Even though Senate Majority Leader George Mitchell had declared the unpopular HillaryCare dead in September of that year, the Republican Party gained 54 seats in the House and 8 seats in the Senate to win control of both the House and the Senate for the first time since 1952.

He then describes the economic conditions under the first four years of Clinton’s presidency:

During the first four years of his Presidency, real GDP growth average 3.2%… Employment growth was a respectable 2 million a year. But real hourly wages continued to stagnate, rising only 2 cents to 7.43 an hour in 1996 from $7.41 in 1992. No real gains for the middle class there. …

With that stage set, Kaldec then describes what actually led to the astounding growth we saw in the late 90s, and it wasn’t tax increases on the wealthy:

However, with his masterful 1995 flip-flop on taxes, President Clinton took the first step toward a successful campaign for re-election and a shift in policy that produced the economic boom that occurred during his second term.

  • Welfare reform, which he signed in the summer of 1996, led to a massive reduction in the effective tax rates on the poor by ameliorating the rapid phase out of benefits associated with going to work.
  • The phased reduction in tariff and non-tariff barriers between the U.S., Mexico and Canada under the North American Free Trade Agreement continued, leading to increased trade.
  • In 1997, Clinton signed a reduction in the (audible liberal gasp) capital gains tax rate to 20% from 28%.
  • The 1997 tax cuts also included a phased in increase in the death tax exemption to $1 million from $600,000, and established Roth IRAs and increased the limits for deductible IRAs.
  • Annual growth in federal spending was kept to below 3%, or $57 billion.
  • The Clinton Administration also maintained its policy of a strong and stable dollar.  Over his entire second term, consumer price inflation averaged only 2.4% a year.

The boom was on.  Between the end of 1996 and the end of 2000:

  • Economic growth accelerated a full percentage point to 4.2% a year.
  • Employment growth nudged higher, to 2.1 million jobs per year as the unemployment rate fell to 4.0% from 5.4%.
  • As the tax rate on capital gains came down, real wages made their biggest advance since the implementation of the Reagan tax rate reductions in the mid 1980s.  Real average hourly earnings were (in 1982 dollars) $7.43 in 1996, $7.55 in 1997, $7.75 in 1998, $7.86 in 1999, and $7.89 in 2000.
  • Millions of Americans shared in the prosperity as the value of their 401(k)s climbed along with the stock market, which saw the price of the S&P 500 index rise 78%.
  • Revenue growth accelerated an astounding 59%, increasing on average $143 billion a year.  Combined with continued restraint on government spending, that produced a $198 billion budget surplus in 2000.

Shared prosperity indeed!  But one created not by raising tax rates on high income but not yet rich middle class families, and certainly not by raising the capital gains tax rate or by imposing the equivalent of the Buffett rule, a new alternative minimum tax of 30% on incomes over $1 million, nor by massively increasing federal spending.

Rather, it was a prosperity produced by freeing America’s poor from a punitive welfare system, lowering tariffs, reducing tax rates on the creators of wealth, limiting the growth of federal government expenditures, and providing a strong and stable dollar to businesses and families in America and throughout the world.

So there you have it. Tax cuts and good fiscal policy did what Carney is arguing happened because of the 1993 tax increase on the wealthy.

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  • http://profile.yahoo.com/KYTC7EGQASGOTQYPY2KPC4XCZY Don

    Even Clinton admitted the tax increases were excessive and a very big mistake. Obama and his whole administration lives a total lie because they are incapable of the truth.

    • WordsFailMe

      I hope they keep repeating this lie for a couple of cycles. It’s beyond stupid. It’s all the way at the level Obamaphobia. That’s when you get really thirsty, feel like biting everything and end up just sniffing you own b***.

      • Rshill7

        Do you know what phobaphobia is?

        Fear of having a phobia.

  • MaroonRepublic

    More BS from Goebbels, I mean carney.

    • radioone

      “More BS from Goebbels”….but, but, the LSM will take notes with no questions, report what he said, so that Will Make It True.

  • pistol pete

    The democrats controlled all three branches in 2003 when they raised taxes.That led to the republicans taking a majority in the Housee in 1994.It was the republicans cutting taxes that jump-started the economy.They need a better paid liar for press secretary…maybe Bill Clinton.H was always pretty good at it.

    • http://www.therightscoop.com/ The Right Scoop

      you mean 1993

      • pistol pete

        You’re right.My bad.Its hard being accurate when you’re typing with your nose.

        • Rshill7

          Try using your elbows :-)

          • http://tinyurl.com/wwsotu Whitewolf2009

            ROTLF!! :-)

          • E. Lee Zimmerman

            When they tire, just flip out the Johnson Rod.

  • Sober_Thinking

    Carney is a tool… he’s a mouthpiece for the Liar-and-Chief, pResident Crybaby. He’s expected to lie… that’s what he does for a living – that, and look surley and arrogant and demean anyone who speaks ill of his master or asks tough questions. It’s a shame though that the MSM lets him and our dear imperial ruler get away with this bunk. And the dumbmasses will gobble this up as gospel… though they may not like me using the word “gospel”. Yeah, I’m feeling snarky today!

    • freenca

      They do seem to have a lot of troubles in the connecting the dots department. Their picture always ends up looking like the same one they started with, an arrow to socialism! They may need to have their vision checked, and they’ll have lots of time to do that after Nov. 6th. after that they could learn to read, too. I feel snarky today too, Sober.

      • Sober_Thinking

        :)

        Thanks for your response. This too shall pass… (but until it does, rrrrrrrr….)

  • WordsFailMe

    Obama hasn’t met with the Jobs Council and I swear that Carney has never had more than once face to face briefing with President Obeatific in his life!

    The only way Carney can stay in touch with what the President is thinking is by regularly sniffing presidential poop. It’s really the only form of communication between two sentient beings that explain Carney’s, un-carney knowledge of the President’s next, wait for it, move.

    • Rshill7

      Booooooo!

      Aaahahahaha :-)

  • Army_Pilot1967

    Okay, I can’t even watch Jay Clowny stutter and stammer…and I’m presuming that’s what he did in the clip. I know it’s his job to spin everything about his boss, but his performance isn’t smooth, it’s jerky and confusing. I hope and pray that nobama and all his minions will be gone in January 2013!!!!

    • pistol pete

      I think Cornhole is kinda funny.He always looks as nervous as a teenage boy in Barney Frank’s basement.Good morning,my friend!

  • http://tinyurl.com/wwsotu Whitewolf2009

    Carney is living proof that someone will prostitute themselves and parrot all kinds of BS if the money is right. The man has no soul!

    • pistol pete

      How much money is your dignity and self-respect worth?

      • Rshill7

        If you haven’t any, there’s nothing to put a price on.

  • Philo Beddoe

    It would be nice if someone recognized the fact that during the ’90’s, THE WORLD went through a total technological epiphany with the computer becoming mainstream.

    This “new” technology increased productivity, easier B2B and efficiency.

    It also increased PROFITS.

  • Sandra123456

    Also there was the computerization of the country, Jay.

    In the 90’s private businesses and families began to computerize themselves. It was a huge change, like swapping the horse for a car.

    What really happened is the economy grew back then DESPITE the tax increases. Think how much faster it would have grown without the tax increases.

    This nonsense that if we sprinkle the economy with just the right tax increases that the economy will grow baloney, has got to end once and for all.

    • keyesforpres

      Bingo! In fact, the growth would have been much greater if Clinton had not raised taxes.

      Also, they know tax increases won’t cause the economy to grow. They know it will destroy the middle class. Exactly what they want.

  • welltempered2

    If there was one canard by the left that shows what simpletons they are it’s “tax increases on the rich makes the economy boom.” In addition to what the Forbes article states we were in a once a century tech/telecom/internet revolution and the end of the cold war “peace dividend.” Also government spending increased only 2-3% during the boom, hence a balanced bidget.

    • pistol pete

      The democrats know lowering raxes increases the revenue coming in to the government.With them,its not about the money-its about the power.

  • Rocco11

    Yea, it couldn’t have been that internet bubble. Remember the Nasdaq was over 5 grand? lol

  • anneinarkansas

    The Republican Congress changed things in 1996….JJ’s history is probably about as good as that of Obama.

  • 911Infidel

    Much of that economic boom was driven by the computer industry that saw a burst of startup companies in the 90’s.

    You know everything that proceeeds out of the mouth of Carney is empirical proof that he is a complete moron.

  • kong1967

    Here we go again. Just like the 90% tax rate on the rich lifted us out of the Great Depression. These people are taking some serious LSD.

  • E. Lee Zimmerman

    Yep, but you can’t trouble Doogie Carney with facts.

  • welltempered2

    Economic illiteracy is rampant!

  • E. Lee Zimmerman

    Following Jay’s logic, one might conclude that this snippet is empirical proof that he’s ignorant of history.

  • steprock

    If you want more fruit from a tree, the secret is to pluck as much fruit from it and chop off as many limbs as you possibly can, forcing that tree to give up as much fruit as it will produce from the limbs it has remaining.

    Right.

    Liberal logic sucks.

  • maynardb50

    Was Carney even born back in 1993??

  • EchoMike

    So again from this administration, govt was responsible for the growth.
    Are we really expected to believe that there’s a magic number in the tax code that MAKES the private sector grow?
    This shows yet again the economic illiteracy that permiates this administration.
    Also, can we please drop this charade that once they get this tax rate, that’s where it’s going to stay, and every dime collected is giong to go straight to deficit reduction, or paying down the debt? PLEASE!
    They’ll get that money, blow it, and then we’ll here the same crap about 4o% tax rate, and then when that’s not enough it’ll go higher and higher, and the definition of “rich” will get lower and lower because there is no amount of money in existence to fund this Utopia the libs dream about. Today’s 250K will be tomorrows 150K or lower, untill we’re all just poor and miserable. Then they’ll have that “equality” they’ve been seeking for so long.

    • http://profile.yahoo.com/44F4AB4VSCTOCHBMBG4ZWWD5OU Laurel

      “Socialism is a philosophy of failure, the creed of ignorance, and the gospel of envy. It’s only inherent virtue is the equal sharing of misery.” ~Winston Churchill

  • http://profile.yahoo.com/44F4AB4VSCTOCHBMBG4ZWWD5OU Laurel

    This progressive narrative that they have been pushing for several years now isn’t flying. It is straight out of Center for American Progress. And those of us who lived those taxes in the middle class didn’t find them so peachy. Yes we were employed but the government’s continued taxation people could barely keep their head above water. I remember working overtime and ending up with less money thanks to Clinton’s tax code.

  • Hornet414fixer

    This guy talks more crap than Axelrod (aka axel grease) period! Another Ivy Leaguer (Poison Ivy) who is feed this entire BS and spits it out as gospel to the uninformed public! You have got to be kidding me!!!!! How in the world does he look himself in the mirror in the morning, afternoon and evening and explain to his family how he has sold his sole (if he has one) to the government? This guy is so educated in propaganda that he “STUPID”.

  • James1754

    Why does anyone believe any spin that this idiot comes up with?

  • http://profile.yahoo.com/OOKK3KBK7M2DX5OKOV7ODZ3QTA Jay

    Watch his body language. He’s really trying to believe his own (or his master’s) BS. We should start calling Spokesboy Carney “Dervish” the way he spins. Besides, he’s got a lot more teeth and fewer tattoos than any carney I’ve ever seen.

  • Bobemakk

    This guy is just as bad as Gibbs. A fool! The wealthy create jobs within the companies that they own, built on their own with NO HELP from the government. When will they realize that?