Media pundits seem baffled that Vice President Al Gore is not doing better in the polls, since a prosperous economy is supposed to create voter support for the administration. But the voters may be wiser than the Beltway insiders, by not automatically crediting the Clinton administration with prosperity or the budget surplus.
No president can create a surplus or a deficit. All spending bills have originated in the House of Representatives for more than 200 years, as required by the constitution. When the Democrats controlled the House of Representatives for decades, we had deficits for decades. After the Republicans finally took over the House of Representatives in 1994, we started to see deficits begin to decline and a surplus emerge.
Yes, Clinton and Gore were in charge of the executive branch of government while this was happening, but neither of them could spend a dime that was not authorized by Congress. If they could, we wouldn’t even be talking about a surplus.
With the Clinton administration unable to engage in the kind of runaway spending that has been the hallmark of Democrats for more than half a century, and with little hope of getting more intrusive government controls of business through a Republican Congress, the climate was ripe for business to flourish and for the economy to flourish with it. The record tax revenues resulting from the economic boom created the surplus.
Part of Al Gore’s last-minute scare campaign is the notion that we dare not risk our current prosperity by going back to the bad old days of deficits and economic stagnation. In reality, the last time the Democrats had control of both Houses of Congress and of the White House at the same time were the 1970s. That is when we had double-digit inflation, double-digit interest rates and double-digit unemployment.
Al Gore was himself one of the biggest spenders in Congress and — in two years — was ranked the number one big-spender by the National Taxpayers Union. You can imagine what it took for him to outspend Ted Kennedy.
Despite the boastful Clinton/Gore rhetoric about “growing the economy,” government does not create economic growth. The best the government can do is stay out of the way while other people create products, jobs and prosperity. Gore’s own rhetoric, as well as his record, shows that he is just itching to tell other people what to do in the economy, whether with “targeted tax cuts” or with more regulations and red tape imposed on the marketplace.
Targeted tax cuts are a stroke of genius politically — and a disaster otherwise. Targeted tax cuts mean that you get to spend some of the money you earned only if you do what politicians tell you to do with it. These kinds of tax cuts also mean that you have a hard time qualifying under all the terms in the fine print, so that there will be far less tax relief in practice than in theory.
The other great economic fallacy of the Gore campaign is that it is “risky” to allow people to invest part of their Social Security in the stock market. But risk depends on the time period involved. Over a period of a year, the stock market is not as safe as a bank account. But, over a period of ten or twenty years, the stock market is far safer. People who saved their money in a bank in the 1960s saw most of the purchasing power of their savings destroyed by inflation by the 1990s, while those who put their money in stocks saw stock prices rise right along with inflation, as they usually do.
Young people who want to retire in 20 or 30 years are far safer to put their money in a reputable mutual fund than to put it into anything as subject to inflation and politicians as Social Security. When it is hard enough to predict who will be elected in a few days, how safe can it be to bet your retirement on which politicians will be elected over the next 20 or 30 years and what they will choose to do with Social Security?
Al Gore’s claim to put Social Security money “in a lock box” may sound reassuring to the gullible, but it is itself just another example of irresponsible political rhetoric. There is no way to prevent future Congresses from doing whatever they want to do with Social Security. And what they have done so far is why there is a problem in the first place.
Although politicians cannot create either economic security or prosperity, they can ruin both. This is why government should have as small a role as possible in the economy. That makes it an easy choice between Bush, who understands this, and Gore who denies it.
