As we suffer through one of the worst presidents and administrations in generations, if not ever, we hold out hope to throw them out in 2012. I recall conservative friends of mine who didn't believe Obama could cause much damage in one term. I wonder how many think that now?
Each election has consequences, presidential elections have long term consequences long after new administrations have taken their place. Let's look back to Jimmy Carter and his administration that lasted from 1977 through January of 1981.
Jimmy Carter's deficit spending caused the Fed to have to monetize (print) 13% more money to cover it. That 13% when velocitized (put in the market) created 12% inflation, a very high number in American history. This caused Paul Volcker to raise interest rates to 21% to stagnate the economy, pull that extra money out of the marketplace and slow down the inflation. This was all part of the term stagflation where inflation sucked up your buying power while people were out of work or incomes remained flat at best.
During Carter's years the very fabric of life for American families changed forever. Just look at housing prices. In 1975 the average price home in America was about 25,000.00 just slightly higher than they had been since 1960. From 1975 until 1980 the average price went from 25,000.00 to about 50,000.00. The price increases have not slowed down until 2008. Game changer. Let me ask you a question, did the price of real estate skyrocket, or did the value of money shrink? For those who didn't buy and ride the inflation train it was devastating to their net worth. For those who did, they were able to keep more value to their earnings. Just in the last twelve years statistics show that the average homeowner has between 31% and 46% more net worth than does the average renter. Further it is cheaper to own than rent like homes in three quarters of all American cities. So those who didn't own and didn't have that vehicle to stay even with inflation took huge economic hits.
When you have inflation your cost of living skyrockets. To combat this families changed their lifestyles. Mothers who had children at home who went to work to help support their families went from 37% in 1975 to over 70% in 1980. After factoring in the costs of supporting another person working outside of the home, child care, auto costs, clothing, etc. most of the income went to pay the increased taxes on the family. The percentage went as high as 77% but dropped for the first time in 2004 to 73%.
So now we have most children in day care, parents schedules stressed, to pay for more expensive housing along with everything else. If you run studies of pricing, you will see that most of America's inflation started during Carter's years, and we are still paying for it.
Now we have Barack Obama and his Administration, who have increased deficit spending during the first 18 months that has required the Fed to monetize (print) 120% more money, it is just now starting to velocitize to the market place, and we are all seeing almost all of our commodity purchases skyrocketing in price. Who knows were it will go. I have no idea what to tell you do to hedge against this coming inflation, other than if it repeats Carter's history housing might be the best hedge long term.
The best news from the Carter years is that he wasn't able to appoint any Supreme Court Justices, because those judges push agendas for decades to come. Unfortunately Obama has already put in two highly politically active judges to promote his ideology for at least a generation or two. Just one more area of great damage we will have to over come.
If nothing else, hopefully, more Americans will start to understand that Presidential politics are not only for four years, but for generations each.
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When my parents bought the farm where they still live in 1967 they bought 80 acres and house between Noblesville and Carmel for 56,000.00 and thought they were taking on the third world debt.
ReplyDeleteThis time I couldn't even get past the first sentence without being reminded of your mental incapacity. Bravo.
ReplyDeleteThis comment is half in response to this entry and half in response to a recent post on your Facebook.
ReplyDeletehttp://tinyurl.com/3qula26
Check out all of the recent presidents' budget deficits and surplus. Jimmy Carter, with his horrid deficit spending, had deficits of around 50 billion throughout his presidency. Your beloved Reagan, however, hovered near 200 billion--four times that of Carter. H.W. Bush went on to have even higher deficits than Reagan. Clinton then managed to produce the first budget surplus in decades, only to have W. come along and produce the largest deficits yet.
http://tinyurl.com/3nphzwc
Here's a graph of the national debt (corrected for inflation) for good measure. Match up the years with the presidents and you can clearly see that since Carter, the national debt has remained stable or declined with democrats in office and skyrocketed when a republican has the presidency. Kind of makes you wonder which election had the longest term impact, doesn’t it?
Keep whining and ignoring obvious facts when they're right in front of you. It's what you do best.
I do not want to make you look bad, but unfortunately it is obvious that you don't understand civics 101. It is the House that spends the money, under Jimmy Carter, Ronald Reagan, and Barack Obama all had Democrat controlled Congresses spending the money. Carter and Obama were catalysts pushing spending, Reagan was able to actually increase revenue by cutting tax rates. Clinton was credited for the Newt Gingrich balanced budgets.
ReplyDeleteNo shit Sherlock. Who do you think proposes the budget to Congress first? The president. If the president's party has a majority in Congress, he is likely to get most of what he wanted in the budget. Same for if the president's party is the minority, but still supportive like with Reagan. The House may spend the money, but it's still the president who usually has the biggest influence on the budget. It's only when both sides are too proud to consider working with the other toward a compromise that the government runs the risk of a shut down.
ReplyDeleteAnd for the record, the theory of cutting taxes in order to increase revenue is flawed logic that has no rational economic thinking behind it, has never worked, and never will work.
Sorry you are incorrect. But nothing new there.
ReplyDeleteHey, you were the one whining about me posting things like that and not arguing specific details on that other entry. I changed, so how about you return the favor pal?
ReplyDeleteIf you look at what happened to the revenue that came in when John F. Kennedy cut taxes, if you look at the same when Reagan did, or when George W. Bush did you will find that each set new records including in 06. Unfortunately JFK and GWB were political clones they both understood that they would enflame the economy and would bring in more taxes because of it, yet both wanted to use that increased revenue to grow government.
ReplyDelete