The greatest tax and spender in US History: Bush

I've really been into researching our current economy and the policies of all Presidents since Johnson. Each president since Kennedy has contributed to worsening the financial worthiness of the US Government, but it turns out GW Bush is the biggest offender ever.

Most people on these boards and indeed the man on the street look only to one statistic to determine how economically effective a president is:

personal income taxation rates.

They heap scorn on those who raise rates, and lavish praise on those who cut it. "Clinton was an economic disaster, and Bush saved America! He gave me $400 back on my tax return!" I'm here to show the opposite.

It turns out there are even more important factors when determining if a president is eroding your purchasing power.

Purchasing power is much more important statistic than your dollar net worth or dollar wages. Obviously if you make 20% more in wages, but the prices of all purchases goes up 50%, you're able to purchase less and are effectively poorer. If your investments make 10% a year, and inflation is 12%, you're losing money. Yet people are bamboozled time and again when they appear to have more dollars in the bank and their purchasing power is diminished. That's why inflation is the most feared statistic among fiscal conservatives. It erodes net worth.

It's clear America is running deficits. A federal deficit, trade deficits, consumer deficits. Our actual economy is actually measured in large part by how much we consume, not how much we produce. 72% of our economy is consumer spending, which now that our savings rate has gone negative, is all consumption.

When you run a deficit, you have to borrow against your deficit. Eventually you have to save and give away something of value to the holders of your IOUs.

Our trade deficit is 800 billion every year. That means we give away, every 2 years, the value of the companies of the Dow Jones 30, to foreign investors in Saudi Arabia, China, and Europe. They now own 3 trillion more of us than we own of them. All that real capital goes out of our economy, and into the foreign economies. So things spiral over time and get worse and worse.

Bush has given the federal reserve the green light to print arbitrary amounts of new cash. That is the root of inflation. We all know Bush likes to stretch the truth on his governmental reports. He's been misrepresenting how much we've been printing, how much inflation has been rising, and how much of our economic growth is actually inflation, and not real growth. But how could they do this without economists downgrading our economy?

In 2006, Bush ordered that we would no longer publish the figures comprising M3. M3 is the total money supply, and by not publishing it, we can no longer gauge effectively how much the federal reserve is printing.

Likewish Bush's team mandated ultra-low borrowing rates. Wall Street was happy, because they knew Bush wouldn't regulate the new market for CDOs based on giving cash to unworthy credit risks, and Bush was happy because it seemed like we were creating wealth through home values. Unfortunately, wealth is only if you create something, and the value of a home is not what a past buyer paid, but what a future buyer can afford to pay. We're seeing that house of cards fold right now.

If you factor in inflation, the American stock market has actually lost money every year in the Bush administration. By ratcheting up inflation, Bush has taken away our purchasing power and still been able to say he's cut taxes, even while our dollar buys less than if we'd raised taxes and kept inflation in check.

So Bush has run America like a .com company. No real assets, lie about your revenues, and get people to buy into the business while you reap the rewards. It's my belief it's all about to unwind.

If you contrast taxation to deficit spending, let's see where the money comes from and goes to. With taxation, you tax citizens and corporations, both foreign and domestic, that do business or gain revenue in the US. You distribute that money to people in the US, to the armed forces, to the elderly and sick, and to the poor. With deficits, you float treasury bills that are bought by foreign banks and corporations, and pay them the principal and interest.

During the Clinton year, real capital was invested in the stock market. When the market tanked, it wiped out value, but it was real value and retained its original owner, although diminished. The average citizen did see a better standard of living throughout his term. During Bush's consumption-fueled term, we've hit a 46% debt or leverage ratio in stock investment, much of it from artificial wealth from housing equity. When we wipe that out, it means capital flows out of the US, and into the foreign debt holders.


So I'll put my money where my mouth is. Since I think Bush has been awful, and things will only get worse, I'm getting out of the American dollar. I'm buying ETFs (Exchange traded funds) based on gold bullion, and buying foreign stocks and foreign currencies. The british pound is at a 26 year high against the US dollar.

Those of you who believe that Bush was fiscally better than Clinton can stay in stocks, US dollars, and US Bonds. If you're right, you'll be taking my money. If I'm right, I get to have your money. And hopefully we'll end the charade of partisanship without backing it up by our cold hard dollars (or in my case, Euros).