As the fight continues over whether to raise taxes to ratify the additional $3.6 trillion President Obama and the Democrats have spent in just 27 months, you hear the same refrain from Democrats: We must raise taxes to the levels of the Clinton administration. This is always followed by flights of exaggeration portraying the Clinton era economic record as "The Greatest Peacetime Expansion in American History," or in world history, or in galactic history.
They seem to think it was the tax hikes that produced the prosperity.
The economy did expand during Bill Clinton's presidency -- though not quite as much as it had during the Reagan years. Ronald Reagan's presidency required a steep recession to undo the mistakes of his predecessors. Despite that, his overall record was astounding. Real GDP increased 32 percent under Reagan (it was 31 percent under Clinton). Disposable income grew 22.7 percent under Reagan versus 20.4 percent under Clinton. Obviously, both look luxurious from this remove.
Reagan overcame more serious economic woes, including raging inflation and interest rates. Clinton was more fortunate in his timing. By the time Clinton took the oath of office, the economy was already rebounding from a recession. And it's worth noting that as Clinton departed, the economy was dipping into recession again; whereas, the Reagan recovery was still skimming along the waves when the Reagans boarded Air Force One for the ranch in Simi Valley.
But fine, let's give all honor to Clinton for the things he did right. Memo to Democrats: We know you liked the Clinton tax increases, but why do you not praise the other aspects of Clinton's tenure such as the spending restraint, the strong dollar, free trade and the capital gains tax cut?
Clinton deserves credit for his staunch free-trade policies. He had to withstand pressure from unions, a key Democratic constituency, to pursue lower tariffs. Both Clinton and Al Gore stared down the unions in shepherding NAFTA to passage. And though Ross Perot had famously warned that NAFTA would lead to a "giant sucking sound" as American jobs were lost to Mexico, the agreement actually increased U.S. exports and U.S. jobs. Clinton later lost his nerve a bit on trade issues, but for the most part, his was a free-trade administration.
Democrats never laud Clinton's trade record. The Obama administration is certainly not guided by it, preferring, in docile obedience to the unions, to block trade agreements already negotiated by the Bush administration.