Ronald Reagan is a favorite of mine mainly because he was willing to risk
experiments and step up. Not everything panned out and the 1986 amnesty for
illegals, while a noble experiment, did not have the intended consequences in
the long term.
Senators like John McCain went along with him having the best of intentions. It
did have the effect of taking the illegals that we did have and putting them
into the position of being able to refuse to work under the table and pay
taxes. What it did not do is stem the tide at the border. In fact, it may have
stimulated it.
Kennedy-McCain was meant to be a fix, with its fines, fees, requiring learning
civics, getting a green card, paying taxes, criminal checks, and starting the
five year process from the start. That was equated with an amnesty (general
pardon) which it is definitely not. It is more like getting fined in court,
getting community service, and put on probation.
What Reagan is most credited for is the economics. Call it anything you want,
but it meant reduction in the cost of government relative to the Gross Domestic
Product.
Reagan was a great cheerleader, but Newt Gingrich was the quarterback on that
who brought us the reduction in government.
It is the House that pays the bills and it was the Republican House run by
Gingrich that brought budget surpluses. It was not Clinton, certainly, and it
was not the Speaker of the House Dennis Hasert, that replaced Gingrich, for
sure.
He had his hand out to everyone, including, just to start with, Enron. He makes
Dollar Bill Jefferson look like a street punk. He sold the Republican Party
down the river and the results were evident at the last mid-term. Every
Republican lost was replaced by a Blue Dog Democrat. All that group had to do
was promise fiscal responsibility.
For all the mistakes President Bush and Speaker Hasert has made, remember the
old Misery Index of President Carter? That is the sum of the percentage of
unemployment and cost of living raises. President Carter ended up at 20 on the
Misery Index and the Bush Administration is at 10.
Those things take time to change. The cause of that is the cost of government.
We were at 15% when we were getting budget surpluses. We are now at 19% and
rising because of entitlement programs. Entitlement programs are a dead loss
and do not increase the means of production.
The plans of Clinton/Obama include $70+ billion for an economic stimulus
package. It would actually cost around $700 billion over the next five years
and more directed at entitlement programs.
President Bush is proposing shoring up the Subprime Lending for the housing
market. Many of those failed/failing loans are from the Mid West
(Illinois/Ohio) where the auto industry is failing and there has been a great
deal of unemployment. This is the Enron of the housing market and my gut
feeling is it was caused by Dennis Hasert, now retiring.
THIS will be the issue for the Republican Convention. There is a very good
entry explaining this issue in detail at:
http://en.wikipedia.org/wiki/ 2007_Subprime_ mortgage_ financial_ crisis
The Democrats will define it in terms that color this as an entitlements issue.
If the Republicans do not address this issue and NOW, we will hit 21% for the
cost of government and a recession will follow.
There are $1.3 trillion in Subprime mortgages and the increases in rates on
those are going to go up every quarter of this year. The housing starts are way
down with a cost of lost jobs (and tax revenue).
SO, how would RR handle this? What compares with it is the Savings & Loan
Crisis of the 1980s:
http://en.wikipedia.org/wiki/ Savings_and_ Loan_crisis
We bailed them out over a ten year period and stimulated the economy with a TAX
CUT.
http://en.wikipedia.org/wiki/ Tax_Reform_ Act_of_1986
It consisted of income averaging to deal with inflation, an increase in the
standard deduction and low income housing for the middle class and a lower
capital gains tax for the upper middle and upper class.
We had to eat the loss by printing more money raising our national debt. The
housing market stimulus helped keep it to a minimum. The middle class were able
to keep their escrow by not failing on their mortgages or losing their S&L
accounts. The capital gains cuts encouraged investment.
Is RRs answer the best now? I do not know. I do know that real recovery did not
begin until that was resolved and it had to do with putting people back to
work.
Housing can be a real pyramid scheme unless the people buying houses have jobs
that come from an increase in the means of production. That means we have to do
something about the energy problem that creates jobs in that area. I do not
care if it is making windmill farms, opening oil fields, gasification of coal,
biofuel production increases, and nuclear plant building in the short run.
Foreign oil has put us at the mercy of every whim of the energy market since
1973. We went from a net exporter of oil to a net importer of oil in 1973. We
need to stop taxing/regulating our domestic oil and refineries to stimulate it.
We need to tax foreign oil to reduce our dependence and pay for our
development.
Which party/Presidential candidate understands these things and can champion
them? We need another cheerleader like Reagan to inspire another quarterback
like Newt Gingrich. Chairwoman Pelosi is no Newt Gingrich, to say the least.
The inherent vice of capitalism is the unequal sharing of blessings; the
inherent virtue of socialism is the equal sharing of miseries. -- Winston
Churchill
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