Great days for America!
Posted on 05/13/2011 10:44:41 PM PDT by SupplySider
In February 2009 I wrote an article for The Wall Street Journal entitled “Reaganomics v Obamanomics,” which argued that the emerging outlines of President Obama’s economic policies were following in close detail exactly the opposite of President Reagan’s economic policies. As a result, I predicted that Obamanomics would have the opposite results of Reaganomics. That prediction seems to be on track.
When President Reagan entered office in 1981, he faced actually much worse economic problems than President Obama faced in 2009. Three worsening recessions starting in 1969 were about to culminate in the worst of all in 1981-1982, with unemployment soaring into double digits at a peak of 10.8%. At the same time America suffered roaring double-digit inflation, with the CPI registering at 11.3% in 1979 and 13.5% in 1980 (25% in two years). The Washington establishment at the time argued that this inflation was now endemic to the American economy, and could not be stopped, at least not without a calamitous economic collapse.
All of the above was accompanied by double digit interest rates, with the prime rate peaking at 21.5% in 1980. The poverty rate started increasing in 1978, eventually climbing by an astounding 33%, from 11.4% to 15.2%. A fall in real median family income that began in 1978 snowballed to a decline of almost 10% by 1982. In addition, from 1968 to 1982, the Dow Jones industrial average lost 70% of its real value, reflecting an overall collapse of stocks.
President Reagan campaigned on an explicitly articulated, four-point economic program to reverse this slow motion collapse of the American economy:
1. Cut tax rates to restore incentives for economic growth, which was implemented first with a reduction in the top income tax rate of 70% down to 50%, and then a 25% across-the-board reduction...
(Excerpt) Read more at blogs.forbes.com ...
ping for reading in the morning
Great days for America!
There was a reason why the left incessantly spouted the mantra “the worst________since the Great Depression” when discussing anything related to addressing the economic downturn. That would enable them to “naturally” follow what they think “everyone” would acknowledge about FDR’s New Deal: spend your way out of it, of course. Why, it worked for us then, it follows that it is the prudent thing to do today.
Never mind that the actual facts show that FDR’s policies actually extended the Depression...it is the “history” taught in the liberal educational establishment for over half a century that will sway the masses.
Confront a liberal with the information in this article and he/she will insist that Reagan’s policies actually led to worsening debt/deficits during his tenure, that tax breaks for the wealthy were granted “on the backs of the poor”, that Keynesian economics is the way to go, etc.
You can’t fix stupid.
Ping.
BFCR
When President Reagan entered office in 1981, he faced actually much worse economic problems than President Obama faced in 2009. Three worsening recessions starting in 1969 were about to culminate in the worst of all in 1981-1982, with unemployment soaring into double digits at a peak of 10.8%. At the same time America suffered roaring double-digit inflation, with the CPI registering at 11.3% in 1979 and 13.5% in 1980 (25% in two years). The Washington establishment at the time argued that this inflation was now endemic to the American economy, and could not be stopped, at least not without a calamitous economic collapse.Andrew Cuomo made his reputation in 1984 with a brilliant speech ridiculing the "rosy scenario" being painted by Reagan and the Republicans and predicting economic disaster if Reagan were reelected. We saw how that prediction worked out (actually, we didn't. Cuomo was praised ever after for that speech - without mentioning any specifics which in hindsight would too obviously have been claptrap).
economist John Lott has rightly said, “For the last couple of years, President Obama keeps claiming that the recession was the worst economy since the Great Depression. But this is not correct. This is the worst “recovery” since the Great Depression.”
Great article. Unfortunately, the liberals have a deep religious faith in government, and this faith is impervious to all evidence and experience.
Having said that, I'd wonder just how effective some of those policies from the Reagan administration might be today -- especially in light of the fact that most tax rates are already substantially lower today than they were back then.
Thanks
The End of Prosperity: How Higher Taxes Will Doom the Economy--If We Let It Happen , by Laffer, Moore, and Tanous.
....and....
Basic Economics 4th Ed: A Common Sense Guide to the Economy, by Thomas Sowell.
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