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cheebdragon's avatar

How much effect does the president have on the economy?

Asked by cheebdragon (20428points) June 4th, 2013 from iPhone

I’ve always heard that the president has very little influence on the economy. What do you think?

If it is actually true, why does Bill Clinton seem to love taking credit for the economy in the 90s?

(I’m honestly just curious, not trying to start an argument.)

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9 Answers

zenvelo's avatar

The president has little immediate effect except in certain circumstances like the liquidity crisis of 2008. But overall he can set a series of policies that promote expansion while using tax and spending authority to carry out his plan.

RocketGuy's avatar

Republicans say “yes” about Reagan, but “no” about Obama.

Imadethisupwithnoforethought's avatar

Presidents propose things that Congress is responsible for reacting to. For example, Reagan said we are going to have a military buildup, which was a huge stimulus and caused deficit spending. But the economy was stimulated. Carter said he was going to drive down interest rates for the good of the economy, which he really did, but everybody hated him for it.

Clinton gets a lot of misplaced credit in my opinion. The computer revolution boosted productivity in an a-historical way. But what a president does is state new policies and Congress is forced to accept or reject these policies. Which has a huge effect on the economy, regardless of what cynical news casters who think they are really clever tell you. What Obama did with his healthcare act will drive down costs for the next few generations. Nobody in Congress or the private sector was pushing for that in a depression other than him. And now it is law.

ETpro's avatar

Excellent question, @cheebdragon

I ran across an interesting chart today. It was put together by the progressive Economic Policy Institute to prove that corporate income tax rates don’t depress economic growth. The dual-axis chart actually proves more than they bargained for. It proves that at least in the short term, nothing the President or Congress has done over the last 65 years controls real economic growth. Over the long haul, economic policy matters a great deal, and the chart reveals that. But short term it’s apparently driven by factors largely outside the reach of presidents or congress, and the fact that presidents can only suggest economic policy, and sign into law policies Congress passes and the President likes, suggests that presidents receive lots of blame or credit, but have little control.

JLeslie's avatar

I’d say the President doesn’t have much impact. It’s arguable Bush and Obama saved the economy from a worse crash than what did happen several years ago, but overall I don’t give the President too much credit for influence over the economy. If a Republican rants on about Reagan I will bring up Clinton.

The Republicans several months ago ranted on about how taxes are going up (not really, it was FICA reverting back to previous percentages) and how horrible the timing is and it will hurt the economy, blah blah blah, and here we are with the economy showing lots of signs of picking up. Oops, guess they were wrong.

I think the economy is cyclical primarily, and then factors like government, technology, income, and trends (meaning trends in what peopleare buying) affect it also.

jerv's avatar

Realistically, the President is rather limited by Congress due to our constitutionally mandated system of checks and balances. Thing is, it’s easier to blame one person than an assembled body of 535.

When both the White House and Congress are held by the same party, things tend to happen (for better or for worse), whereas when they are not, nothing really gets done at all because partisanship trumps doing what we elected them to do in the first place. The last couple of years are a perfect example, which is why Congress is tied for popularity with Gonorrhea.

RocketGuy's avatar

Both need to be cleared out for the good of all.

Pachy's avatar

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