Google: reagan tax cut myth e.g. http://www.cbsnews.com/8301-503544_162-20030729-503544.html
"And while Reagan somewhat slowed the marginal rate of growth in the budget, it continued to increase during his time in office. So did the debt, skyrocketing from $700 billion to $3 trillion. " that's an increase of 400 percent over 8 years. People are bitching about Obama's increases to the debt, which are a tiny fraction of Reagan's. Lawson --- In FairfieldLife@yahoogroups.com, "Rick Archer" <rick@...> wrote: > > > Obamanonics vs. Reaganomics > > > One program for recovery worked, and the other hasn't. > > > * By > <http://online.wsj.com/search/term.html?KEYWORDS=STEPHEN+MOORE&bylinesearch=true> > STEPHEN MOORE > > If you really want to light the fuse of a liberal Democrat, compare Barack > Obama's economic performance after 30 months in office with that of Ronald > Reagan. It's not at all flattering for Mr. Obama. > > The two presidents have a lot in common. Both inherited an American economy > in collapse. And both applied daring, expensive remedies. Mr. Reagan passed > the biggest tax cut ever, combined with an agenda of deregulation, monetary > restraint and spending controls. Mr. Obama, of course, has given us a $1 > trillion spending stimulus. > > By the end of the summer of Reagan's third year in office, the economy was > soaring. The GDP growth rate was 5% and racing toward 7%, even 8% growth. In > 1983 and '84 output was growing so fast the biggest worry was that the > economy would "overheat." In the summer of 2011 we have an economy limping > along at barely 1% growth and by some indications headed toward a > "double-dip" recession. By the end of Reagan's first term, it was Morning in > America. Today there is gloomy talk of America in its twilight. > > My purpose here is not more Reagan idolatry, but to point out an > incontrovertible truth: One program for recovery worked, and the other hasn't. > > The Reagan philosophy was to incentivize productionâ"i.e., the "supply side" > of the economyâ"by lowering restraints on business expansion and investment. > This was done by slashing marginal income tax rates, eliminating regulatory > high hurdles, and reining in inflation with a tighter monetary policy. > > View Full Image > > > > stevemoore <http://si.wsj.net/img/BTN_insetClose.gif> > > stevemoore > <http://si.wsj.net/public/resources/images/ED-AO139_stevem_G_20110825162903.jpg> > > > The Keynesians in the early 1980s assured us that the Reagan expansion would > not and could not happen. Rapid growth with new jobs and falling rates of > inflation (to 4% in 1983 from 13% in 1980) is an impossibility in Keynesian > textbooks. If you increase demand, prices go up. If you increase supplyâ"as > Reagan didâ"prices go down. > > The Godfather of the neo-Keynesians, Paul Samuelson, was the lead critic of > the supposed follies of Reaganomics. He wrote in a 1980 Newsweek column that > to slay the inflation monster would take "five to ten years of austerity," > with unemployment of 8% or 9% and real output of "barely 1 or 2 percent." > Reaganomics was routinely ridiculed in the media, especially in the 1982 > recession. That was the year MIT economist Lester Thurow famously said, "The > engines of economic growth have shut down here and across the globe, and they > are likely to stay that way for years to come." > > The economy would soon take flight for more than 80 consecutive months. Then > the Reagan critics declared what they once thought couldn't work was actually > a textbook Keynesian expansion fueled by budget deficits of $200 billion a > year, or about 4%-5% of GDP. > > Robert Reich, now at the University of California, Berkeley, explained that > "The recession of 1981-82 was so severe that the bounce back has been > vigorous." Paul Krugman wrote in 2004 that the Reagan boom was really nothing > special because: "You see, rapid growth is normal when an economy is bouncing > back from a deep slump." > > Mr. Krugman was, for once, at least partly right. How could Reagan not look > good after four years of Jimmy Carter's economic malpractice? > > Fast-forward to today. Mr. Obama is running deficits of $1.3 trillion, or > 8%-9% of GDP. If the Reagan deficits powered the '80s expansion, the Obama > deficitsâ"twice as largeâ"should have the U.S. sprinting at Olympic speed. > > The left has now embraced a new theory to explain why the Obama spending > hasn't worked. The answer is contained in the book "This Time Is Different," > by economists Carmen Reinhart and Kenneth Rogoff. Published in 2009, the book > examines centuries of recessions and depressions world-wide. The authors > conclude that it takes nations much longerâ"six years or moreâ"to recover > from financial crises and the popping of asset bubbles than from typical > recessions. > > In any case, what Reagan inherited was arguably a more severe financial > crisis than what was dropped in Mr. Obama's lap. You don't believe it? From > 1967 to 1982 stocks lost two-thirds of their value relative to inflation, > according to a new report from Laffer Associates. That mass liquidation of > wealth was a first-rate financial calamity. And tell me that 20% mortgage > interest rates, as we saw in the 1970s, aren't indicative of a > monetary-policy meltdown. > > There is something that is genuinely different this time. It isn't the nature > of the crisis Mr. Obama inherited, but the nature of his policy > prescriptions. Reagan applied tax cuts and other policies that, yes, took the > deficit to unchartered peacetime highs. > > But that borrowing financed a remarkable and prolonged economic expansion and > a victory against the Evil Empire in the Cold War. What exactly have Mr. > Obama's deficits gotten us? > > Mr. Moore is a member of the Journal's editorial board. >
