FORTUNE -- President Bill Clinton presided over one of the most robust economies in American history. And while some of his success may have been a result of timing and some luck, his leadership his ability to create a consensus, in particular surely had a role and has some people waxing nostalgic over Clintonomics. (Clinton has a new book on the economy, Back to Work, coming out Nov. 8.) Fortune managing editor Andy Serwer met to discuss current economic events with the 42nd President, who was in the midst of his annual Clinton Global Initiative extravaganza in New York City. Edited excerpts:

How to fix the economy and create jobs

First, Congress and President Obama can adopt strategies designed to unleash the massive amount of capital that is accumulated but not being invested. There's some $2.2 trillion in cash in American banks that is not committed to loans. A couple hundred billion has to be held back for bad mortgages, but there's about $2 trillion that could be used in cash reserves for up to $20 trillion in loans. So, in theory, that would take the world out of recession. And U.S. corporations have about $2 trillion more that they have decided not to invest.

The second thing is to accelerate the resolution of the home mortgage crisis, which would make businesses more eager to borrow, expand and consumers more willing to spend. These kinds of financial crises typically take about five years to get over. What we're really trying to do is beat the historical trend by getting over it more quickly. We can't do that unless we do on a larger scale what we did in the S&L crisis, which is to flush the debt quicker.

The third category includes things that will strengthen our position today and tomorrow. We need to bring back manufacturing. We need to focus on exports. We need to focus on green technologies. There are dozens of things we could do that would create jobs.

Mortgage relief

I cannot emphasize the boost I think it would give the economy if we had a system that said to people whose homes are worth less than the mortgages that you can write down your mortgages to the value of your home if you can make the payment. Or you can extend the mortgage out and lower the interest rate. I don't think we ought to keep dumping these houses on the market when it's so depressed. Can we get the votes to do it? I don't know. When the Tea Party started, they seemed to object to the bailout of the big banks, claiming they were being protected from their own mistakes. That was true, but irrelevant. If a financial collapse had happened, we would have all paid. Now a lot of people argue that you shouldn't rewrite these mortgages because people never should have taken them out in the first place. There's a big problem with that thinking. The market is so depressed that it's hurting everyone else.

Tax reform

The only fair thing to do is a version of what we did with individual tax reform back in the '80s. We need to broaden the tax base by cutting down on deductions and credits and lower rates. I think Congress will do that within a year. I would also like to see money repatriated now for free, with no taxes. We're the only rich country in the world that still imposes taxes on corporations on money they earn overseas. I think they ought to bring it back for nothing if they put people to work with it. And if they want to spend it on compensation or stock buybacks or dividends, let them pay the long-term capital gains rate.

"The Buffett Rule" (The rich pay more)

If we had to raise revenues, it's fair to ask those of us in high-income groups, who got the primary benefit of growth over the last decade. More than 40% of the income growth went to the top 1% of us. That's a stunning statistic. The lion's share of the tax cuts in the last decade, under President Bush's tax cuts, benefited us. The problem is, no matter how much tax we pay, it won't get the budget in balance. I don't mind paying more. But how much is not nearly as important as our having both an aggressive effort to restore growth today and a 10-year plan.

The private sector's obligation to create jobs

If you're in the private sector, your first obligation to your investors, to your customers, and to your employees is to provide a product or a service at a sufficient profit to keep the enterprise going. But when a company does have extra money, I think it's a good idea to invest in the community, because I think it's not only the morally right thing to do, it's good for the companies involved.

The Tea Party's government phobia

The problem is that there's not a single example on the planet of a successful economy that runs on the antigovernment model. All the successful economies have public/private cooperation to generate economic opportunity, provide a good education, create an environment where government and the private sector work together and advance economies. The only thing I'd say to the antigovernment crowd is that we've got to do what works and what works is cooperation, not conflict.

Does the President have power over the economy?

Oh, quite a bit. Look at President Reagan's policies. I give him a lot of credit for the deregulation work he did and the bipartisan resolution for the Social Security problem. But I also think that his tax cuts, which were very large, spurred economic growth in a way that wasn't sustainable. It worked, but when the first President Bush took office, he basically got all the downside of having a deficit-spending model of generating jobs. Now, my program wouldn't have been successful either if we hadn't had a theory of private sector growth. I was fortunate. I became President when the information technology revolution broke out.

More on the housing market

There are all these options and I don't think we ought to keep dumping these houses on the market right now when it's so depressed. I'd like to see them converted into rental property in an aggressive, comprehensive way, and let people rent it for the price of the utilities, the taxes, and the maintenance, just to maintain the housing stock. Then as the economy picks up, you can put it back on the market in a way that will support economic growth, not undermine it. That's what I think should be done.

And in a larger sense, the market is so depressed that it's hurting everyone else. It used to be as a rule of thumb, people would say, well, if the mortgage is foreclosed on on your block, it will drive down the value of your house because it's on your block, by 10, 15, 20%.

But now there are so many houses that have been foreclosed on, it's driven down the value of almost everybody's houses, except -- let's talk about the upside -- the people that are in the prosperity centers of America: in Silicon Valley, in San Diego, in Orlando, and places where the economy is booming. Except for those places, this is a problem.

I can't -- I think it would really get us going in a hurry if we could flush this out.

On paying more taxes

No, no, I'm in favor of it because -- and I don't consider it class warfare. I mean we had -- if you look at from 19 -- from the end of the Second World War to about 1980, we had enough inequality to reward hard work and raw talent and creativity, and enough equality to build the world's greatest middle class and allow poor people a reasonable chance to work their way into it.

And the distribution was the bottom 90% had 65% of the income; the top 10% had 35% of the income; the top 1% had about 9% of the income.

And those numbers have changed in the last 30 years. The 90% share has dropped from 65 to 52. The 10% share has gone from 35 to 48. The 1% share has gone from 9 to 21.

That's a breathtaking increase in inequality, and I don't think it's good for our long-term stability.

On the Clinton Global Initiative

This year we're working on the creation of jobs in America and around the world. We're working on building an economy that can be maintained. That is helping countries develop an economic model that takes account of the challenges of global warming and resource depletion locally, where you can still keep promoting growth and jobs in a sustainable way.

And we're working on trying to equalize opportunities in the world for girls and women because that's a big economic drag on a lot of very poor countries. It's not anything we think about. We tend to take that for granted in America, that women should be able to stay in school as much as they want, and have access to the workforce. That's not the case in many, many countries.


http://finance.fortune.cnn.com/2011/10/07/bill-clinton-economy-interview/?hpt=po_bn5

We need Clinton. We really do. He was an outstanding president who
has an excellent grip on our financial situation and the options
available to improve the US and world economies.

It would be a smooth move for Obama to try to utilize him in a more
direct way somehow even though Clinton surely has the Obama administration's
blessing on his current role in bringing this message to the US public.

Thanks for posting. Very interesting read.

Just trying to post articles that don't blame someone........lol

I wonder if it includes lots of adulterous fornication and BJ's and cigars?

whats wrong with cigars? whats wrong with BJS? werent they only an item because they were part of adulterous fornication? kind of trying to get three for one huh?

and those issues

are they 'political'(impacts me or any other voter),, or 'personal' (impacts the subject in question or those close to him only)?

Nothing wrong with BJ's if your married and they are from your wife, and cigars well that is just wrong on SO many levels and it's not personal when your the leader of the free world, boinking a member of your staff on the taxpayers dime THEN commit multiple felonies by lying during an investigatio THEN costing the taxpayers a lot of money paying for DNA tests, lab work and FBI Agents(Who could be catching rapists and serial killers and terrorists) to investigate the crimes committed just so he could get his %^&* wet.

HAAAAAAAAAAAAAAAAAAAA


from bjs to the money spent on government entities paid to investigate things,,,,, thats rich

guess they could have saved money by NOT INVESTIGATING HIS PERSONAL AFFAIR,, but , their choice not to use that money on better pursuits was HIS Fault,,,lol

HAAAAAAAAAAAAAAAAAAAA


from bjs to the money spent on government entities paid to investigate things,,,,, thats rich

guess they could have saved money by NOT INVESTIGATING HIS PERSONAL AFFAIR,, but , their choice not to use that money on better pursuits was HIS Fault,,,lol

Shouldn't be banging interns on the taxpayers time and getting BJ's while conducting Presidential business and during meetings.

Pretty hard to find.

very!

Slick Willy was lucky he had the predecessor he did!
He even left a Surplus,on paper!
Government CANNOT create Jobs!
See Obama!
So actually Slickie wants to create a Chavez-Type Economy,where Government can confiscate anything they desire!
Glad Willie finally shows his real Marxist Colors!
Wonder if he'll be on the Ticket with Obama in 2012!

What is wrong with America Our society has crumbled to what was once a proud, productive society into one that is beyond partisan, deflects/assigns blame, no national pride and almost completely helpless. When did the whole gotcha attitude, where we are more concerned with who was wrong over trying to identify the necessary solutions? Our society is more concerned about blaming the other guy than trying to find a solution for our problems. Is the financial industry to blame? I'm sure they have their part but blaming them or wanting for them to pay for your misfortune is just not sensible. Honestly if the roles were reversed the likelihood of the common person who will readily give up their wealth and resources is just not believable. Everyone contributed to the mess we are in. From the consumer mentality of owning every single new disposable product and technology, to going into debt to afford has items, to treating your homes as an ATM machines to fund vacations you normally should not afford. We are all part of the problem. Think back to when America was a stronger country, the consumer goods that were purchased were mostly domestically produced. American corporations are outsourcing their productions because they cannot compete with foreign made goods. Even if the price difference was less than 1%, companies will eventually lose out to the less costly option. People are more concerned with having the latest and greatest than buying goods that support the livelihood of their neighbors. This is the current mentality but people failed to realize that in the end they are affected by their own actions. The current outrage against the financial sector and wealthy are partly misplaced. Where is the outrage against the movie stars or professional athletes who make obscene levels of compensations? The revolutions Americans should be asking for is not a French revolution but more of an Industrial Revolution.

I think the only cure for our economy and our country is to restore the democracy that we once had. Our country is run by special interest money, pure and simple. Congress represents whoever donates to their election campaigns, not the people in their districts.

The first step should be term limits. The founding fathers set two, four, and six year terms for a reason, and that reason is that lifelong positions smell of monarchy and breed corruption. They assumed, incorrectly, that farmers, ranchers, doctors, and lawyers, would go to congress, represent the people who voted them in, and return home to continue their regular careers. We now have nothing like that at all.

The Senate was to be chosen from the best of our state legislators with a longer term but still chosen by those close to the people.

Big money buys big ad time and big manipulation. The special interest money should stop completely or go through a completely blind trust. Big money supports the two party system making sure that only one of two choices always wins. In many cases, neither of the two choices are much of a choice as both are bought by the same special interest money.

Lastly,we need a balanced budget amendment. Current conditions show how fast we can be bankrupted.

Fascism should rightly be called Corporatism, as it is the merger of corporate and government power." Benito Mussolini

Is the tax system in the United States fair? That's kind of a trick question, as fairness and unfairness are usually in the eye of the beholder. Often, a case for fairness boils down to nothing more than self interest. And because there is no final word on the subject, the debate can go on forever. In the current round, Washington is wranglingover President Barack Obama's call for a"Buffett Rule" to make sure the wealthy pay a"fair share" of taxes -- a percentage of income at least as large as that paidby the middle class. Obama says the rule, named for Warren Buffett, the legendary investor who heads Berkshire Hathaway, would raise additional revenue to help reduce the federal budget deficit, expected to be$1.3 trillion this year. "I will veto any bill that changes benefits for those who rely on Medicare but does not raise serious revenues byasking the wealthiest Americans or biggest corporations to pay theirfair share," Obama said. Opponents, including many Republicans, say raising taxes on the wealthy is unfair because, regardless of the percentage of income paid, the rich already pay far more in actual dollars than other taxpayers. The richest 10% of households pay more than half of all federal taxes collected, according to the Congressional Budget Office. And opponents say a tax hike on the richwould be self-defeating because it would undermine job creation and discourage people from working harder to make more money. "If you tax job creators more, you get less job creation. If you tax investment more, you get less investment," Republican Paul Ryan, chairman of the House Budget Committee, said in a television interview. But, politics and practicalissues aside, what is fair? "Historically, the reason this becomes so contentious, and the reason people shout and fur flies and hair rises on the back of the neck is because, on reflection, there's more than one lynchpin for fairness," says Thomas Donaldson , professor of legal studiesand business ethics at Wharton. Still, he adds, just-minded people should agree on a basic principle: Any notion of fairness should provide for everyone to benefit somehow, even if the benefits are not spread equally. Therefore, concepts of fairness mustalways consider other people's interests, not just one's own. Underlying the fairness debate over taxes is a practical issue: Can the federal government get its fiscal house in order without raising taxes on someone? While many Republicans prefer spending cuts and oppose any tax increases, many economists think tax hikes must play some role. "It's clear to me thatboth spending and taxes have to be adjusted as part of a grand compromise," notes Wharton finance professor Richard Marston . "Bush's tax cuts created too large a hole in revenues," he adds, referring to the cuts in 2001 and 2003 under President George W. Bush. As much as three quarters of the deficit problem can be resolved with spending cuts, such as long-term solutions to the Medicare funding problem, according to Mark Zandi, chief economist and co-founder of Moody's Economy.com. But the rest, he says, will probably have to come from tax increases such as cutting or eliminating deductions, which typically benefit the wealthy the most. "I think there's general agreement that we need$4 trillion in deficit reduction over the next 10 years." While the debate over tax fairness goes on all the time, newdiscussion was sparked by an August 14 guest column by Buffett in The New York Times , in which he said that he and his rich friends had been spared from the"shared sacrifice" national leaders advocate when they talk about reducing the government's ballooningdeficits. "While the poor and middle class fight forus in Afghanistan, and while most Americans struggle to make ends meet, we mega-rich continue to get our extraordinary tax breaks," Buffett wrote, adding: "Last year my federal tax bill -- the income tax I paid, as wellas payroll taxes paid by me and on my behalf -- was $6,938,744. That sounds like a lot of money. But what I paid was only 17.4% of my taxable income -- and that's actually a lower percentage than was paid by any of the other 20 people in our office. Their tax burdens rangedfrom 33% to 41% and averaged 36%." Why the Wealthy Pay Less This is possible because the country's "progressive" tax system taxes different levels of income, and different types of income, in different ways. For a married couple filing a joint return, for example,the first $17,000 in taxable income is taxed at 10%. Income from$17,001 through $69,000 is taxed at 15%, from$69,001 to $139,350 at 25%, from $139,351 to$212,300 at 28%, from$212,301 to $379,150 at 33%. Income above$379,151 is taxed at 35%.These "tax brackets" are the same for everyone, regardless of income. Billionaires pay 10% on their first $17,000 in taxable income, just like everyone else. Although the top rate of 35% kicks in at $379,151, a couple with $400,000 in taxable income would pay less than 35% overall because most of the income would be subjectto rates from 10% to 33%. The 35% rate wouldapply only to the $20,840above the $379,151 threshold. This system would still leave the wealthy paying a larger overall percentage, or"effective rate," than people with less income, were it not for other features. All taxpayers, for example, are entitled to a "standard deduction," or income that is not subject to any income tax. For 2011, that is $5,800 for individuals and $11,600 for couples filing joint returns. For those who itemize their tax returns instead of taking the standard deduction, there are deductions for children, mortgage interest, local taxes paid and charitable contributions, to name just a few. As a result, more than 40% of households pay no income tax at all. However, everyone who earns income, even thosewith no income tax, is subject to the separate 6.2% payroll tax for Social Security and Medicare. (This was reduced to 4.2% this yearto stimulate the economy.) But the payroll tax applies only to the first $106,800 in income. Buffett's examples include the payroll tax, adding 6.2% to the income tax for his office workers who earn less than $106,800. Because wealthy taxpayers do not face payroll tax for income above that limit, their payroll tax is less than 6.2% of their total income, helping to explain how a lower income worker can pay ahigher overall percentage than a rich person. But the chief reason Buffett and people like him can pay a lower effective rate is that much of their income is from stock dividends and capital gains, or the profit on investments. Those sources are taxed at only 15%. Whether Buffett's case is really typical of most wealthy taxpayers has been the subject of much debate, as many well-to-do people who live on big salaries, rather than investments, do pay at high income-tax rates. Buffett's specifics aside, Obama and many Democrats argue that the wealthy should pay more, period.They say the wealthy were the chief beneficiaries of the Bush cuts which helped shift the federal budget from surplus to deficit. Now that times are tough, the thinking goes, the wealthy should pay moreto help fix the problem. Under Bush, the top tax bracket fell to 35% from 39.6%, and the capital gains rate was cut to 15% from 20%. Obama and most Democrats in Congress think the cuts should be allowed to expire as scheduled at the end of 2012. (The original 2010 expiration was extended.) Obama has proposed the Buffett Rule as a guiding principle, leaving the details to a Congressionalcommission composed ofsix Democrats and six Republicans that, by late November, is to come up with $1.2 trillion in deficit reductions over the next decade. Obama wants the deficit cut by atotal of $3.6 trillion over 10 years, with 60% coming from spending cuts and 40% from additional tax revenues. Among the tax-revenue options are restoring thepre-Bush income tax rates, raising rates on dividends and capital gains and eliminating certain credits and deductions, possibly including the popular deduction on interest paid on mortgages. Obama has said he does not want to raise taxes on couples making less than $250,000 a year, or individuals below$200,000. While Democrats and Republicans agree that the commission must come up with very large spending cuts, they are wrangling over how much should come from defense, Medicare, Medicaid and Social Security, the four giants of federal spending. The two sides have not been able to agree on what would be "fair." That is not surprising, as parties with opposing interests can easily come up with reasonable definitions offairness that are very different, says Donaldson. A classic illustration of the dilemma, he notes, concerns a band of isolated soldiers dying ofthirst. A small group crosses enemy lines at great risk and returns with a limited amount ofwater. An argument overfairness ensues. The weakest soldiers say theyshould get the water because their need is greatest. Others say everyone is part of the group and should get an equal share. The water party says it should get more because it took therisk. And the officers say they should get more because they are officers. The tax debate involves similar choices. To one person, it would be fair for everyone to pay the same lump sum in annual taxes. To another, paying the same percentage of income would be fair. Toa third, a fair system would blend the first two, while exempting certain types of income and perhaps charging a surtax on others. According to Donaldson, Buffett has attracted attention, in part, because he advocates a system that would benefit others at his ownexpense. "You can have great inequalities in wealth, but those inequalities should [in some way] benefit those at the bottom" as well as those at the top, Donaldson notes. It can be fair, he adds, for a doctor to earn more thana laborer, so long as the laborer benefits from medical care. On that basis, it might have beenfair for the wealthy to have received the lion's share of the Bush tax cuts if the non-wealthy benefited in some way. Conservatives argue that tax cuts for the wealthy help everyone by stimulating the economy and creating jobs. Republican presidential candidate Mitt Romney, for example, takes a traditionally conservative line in proposing to cut corporate taxes to 25% from 35%, making the Bush tax cuts permanent and eliminating taxes on dividends, interest and capital gains for people making less than$200,000 a year. "The right course for America is to believe in growth," Romney said in announcing his tax plan in early September. Do Taxes Make Us Lazy? While there are lots of ways to look at the numbers, it is difficult to draw a definitive conclusion about the relationship between taxrates, economic growth and job creation. The Bush cuts, centered on the wealthy, did not spurgrowth and job creation.In fact, the economy and financial markets did better in the 1990s, when tax rates were higher. On the other hand, the 1990s did not include a financial crisis like the one that struck in 2008. Zandi notes that at high levels, taxes can undercut job creation, but "not at the rates that are being discussed here." Allowing the Bush cuts to expire, for instance, would raise thetop income tax rate by only 4.6 percentage points, to 39.6%, compared to more than 90% in the 1950s and 50% as recently as 1986. Conservatives also argue that higher tax rates discourage people from working harder to earn more income and produce more tax revenue. Critics of this view say that if financial incentives were that critical, there would not be so many examples of extremely wealthy people continuing to work after money was no longer an issue. Many people choose careers that do not offer high pay. And even if some highly compensated people declined some work because of higher tax rates, other people might step in to do the work that was left undone. Buffett argued that higher taxes would not undercut investment that is key to economic growth. "I have worked with investors for 60 years, and I have yet to see anyone -- not even when capital gains rates were 39.9% in 1976-1977-- shy away from a sensible investment because of the tax rate on the potential gain," he wrote in the Times ."People invest to make money, and potential taxes have never scared them off. And to those who argue that higher rates hurt job creation, I would note that a net of nearly 40 million jobs were added between 1980 and 2000. You know what's happened since then: lower tax rates and far lower job creation." While low taxes can leave employers with more money to hire workers, the current lack of hiringdoes not appear to be caused by a shortage of money. Large American corporations are sitting on record cash reserves that could fuel a hiring binge but has not. Many economists point out that employers do not hire simply because they have the money to do so,but because they need more workers to meet growing demand. Ultimately, the new workers are paid from the revenues generated from additional sales. Much of the recent debate has centered on taxes paid by the wealthy, but a solution to the deficit problem will have to address tax rates for the non-wealthy as well, saysMarston. "The deficit is higher for two reasons....Taxes fell under Bush for everyone [and] expenditures have soared under Obama -- and under Bush, with hisunfunded wars and prescription [drug] benefits." As a percentage of gross domestic product, spending by the government has soared. At around 35%, it is above its long-term average, though just shy of levels reached in the early 1980s and early 1990s, and well below the levels above 50% during World War II. At the same time, tax revenues are relatively low relative to GDP. Receipts from individual income taxes equaled about 6.2% of GDP in 2010, for example, the lowest level since 1950, and well below the 10.2% in 2000, just before the Bush cuts in 2000. The current low rate is due to the cuts, lackluster income growth and high unemployment "I don't see a way to solve the deficit problem without either a large increase inincome taxes on everyone or a consumption tax," Marston notes. "But frankly I don't see the Republicans accepting either anytime soon." Wharton finance professor Franklin Allen also thinks the U.S. may eventually need to introduce a national sales tax, or value-added tax, though this has not been much discussed."They need to raise revenues [and] they need to get rid of this deficit," he says, warningthat growing debt forcesever-greater portions of federal revenues to go todebt service, bleeding money needed for ordinary government functions. "Somebody's got to pay [to reduce thedeficits], and it probably makes sense for the rich to pay for some of it," Allen notes. Although thewealthy have benefited from lower tax rates overthe past decade, they arecurrently suffering as concern over government debt in the U.S. and Europe roils the financial markets, Allen notes. Attacking the debtproblems effectively could help right the markets, leaving wealthyinvestors richer even if they have to pay higher taxes, he adds. "They are going to lose a lot more if the country collapses."

Who wrote this? All the delimiters are missing.

"President Bill Clinton presided over one of the most robust economies in American history."

It later became known as the technology bubble and when it burst the markets lost trillions.

Taking credit for that would be like Bush taking credit for the housing bubble..

It is just absurd..

I can get behind this. We certainly 'pay a price'. I Was thinking that today. I have two hundred channels , bundled with the 'internet' and a telephone service, and I loose connection (reliability) at least as many times in one month as I did in one whole year before these things replaced broadcast television as our media connection.

Women all over can work as hard as men, but children are left out of the picture more and more because of the growth in an EXPECTATION for both to work outside the home.

We make 'gains' , but we certainly pay a 'price' and we really have to look at our own demands and expectations and choices to get to the bottom of it.