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Economy Boomed During 1995 & 1996 Shutdowns

From the Daily Caller:

U.S. economy boomed during 1995/1996 shutdown

By Tim Cavanaugh | September 29, 2013

Every major economic indicator in the United States improved during and after the Clinton-era government shutdown that has dominated news analysis columns throughout the Defund Obamacare debate.

Although the spending gaps that occurred from November 1995 to January 1996 are depicted almost unanimously by politicians and the establishment media as disasters for the United States, in fact the so-called shutdowns, during which a portion of government spending was temporarily reduced, did no discernible damage to the American economy, and may have boosted the financial well-being of the American people.

“I mean whatever effect Obamacare might have on the economy is far less than even a few days of government shutdown,” President Obama declared in a speech to supporters Thursday, giving a characteristic point of view that seems to be shared by a majority of Americans, who strongly oppose a government shutdown.

A review of economic performance, however, tells a very different story. The spending gaps of the Clinton presidency occurred from November 14 through November 19, 1995 and from December 16, 1995 to January 6, 1996.

Despite the greatly ballyhooed furloughs of government employees, unemployment stayed even at 5.6 percent during November 1995, the period of the first spending gap, which ended when a deal cut by President Bill Clinton and Republican legislators allowed government to stay funded at 75 percent.

Unemployment actually dropped to 5.5 percent during the second spending gap, which was more complete than the first.

Unemployment continued to plummet in the months following the shutdown, as a hamstrung Clinton allowed the rate of government spending increases to slow and headed toward the eventual budget surpluses that became the highlight of Clinton’s legacy.

A legacy that was forced upon him against his will.

According to the Bureau of Labor Statistics, unemployment dropped half a percentage point within a year of the first shutdown and had dipped below 5 percent by the spring of 1997.

Why aren’t the unemployed out in the streets demanding a government shutdown?

More surprisingly, gross domestic product increased during both quarters covered by the Clinton-era shutdowns. According to the Bureau of Economic Analysis, GDP began the fourth quarter of 1995 at $7.7 trillion and ended the second quarter of 1996 at $7.9 trillion. By the end of the second quarter 1996 GDP had topped $8 trillion.

Personal consumption expenditures, gross private domestic investment and personal income also increased during and immediately after the shutdown…

The best argument for the Clinton-era shutdown is found in the private economy. According to Federal Reserve flow of funds data, personal income also spiked throughout the period of the shutdown, from $5.2 trillion in the fourth quarter of 1995 to $6.3 trillion in the first quarter and $6.4 trillion in the second quarter of 1996…

Which is very different from what we are seeing under Obama’s glorious recovery, where personal income is actually going down. But don’t tell anybody. And Allah knows, our media guardians won’t.

This article was posted by Steve on Monday, September 30th, 2013. Comments are currently closed.

One Response to “Economy Boomed During 1995 & 1996 Shutdowns”

  1. GetBackJack says:

    What’s the Lesson here, boys and girls?

    The federal government is the single most significant drag on our Economy. But you already knew that.

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