IT'S THE ECONOMY
The Federal Reserve
Labor and Politics
In the 1996 elections, it's the economy all over again. President Clinton says it's better than it has been in decades--and is taking the credit. The Republicans say the rosy numbers are deceiving--and they're promising to make it all better.
According to most estimates, the numbers, to an extent, tell the real story. Unemployment is currently at 5.1 percent, its lowest level in seven years. Inflation is low too. The economy itself is growing steadily at around 2.5 percent, and has been in an expasion since Clinton took office. Interest rates on 10-year loans are at their lowest since the Johnson administration, and small business formation is at a record high. But the economy moves in cycles, and many experts fear that a recession lurks just around the corner.
If a recession indeed arrives, will Clinton take the blame as he has the credit? Will he deserve it. In truth, our elected officials have less control over the economy than they claim. Economic recessions and expansions are a product of myriad factors: some tangible and some psychological, and have proven, over the years, nearly impossible to control. Government spending can stimulate the economy; it can also cause a recession. Tax cuts have the same double edge.
The Fed is the primary monitor of the nation's economy, and its chief inflation fighter. Pehaps the best the federal government can do to dampen economic cycles is to keep its books in order. And for most voters, the only true economic indicator is their own pocketbook. But as we become a nation of investors, trusting not our government to provide, more and more people are turning to the business pages and putting their paychecks into mutual funds. Those who cannot may be left behind; perhaps it is to them the government has the most responsibility.
Both Republicans and Democrats promise to make the economy work for you, the voter. Both promise to build a better future for your children. The voter must decide what can be delivered, and by what path their prosperity is best reached.