Skip to comments.Taking Stock (Ben Stein says Reagan's tax cuts caused recession)
Posted on 08/05/2011 5:35:20 AM PDT by reaganaut1
I have been reading about fiscal policy under Ronald Reagan in my father's splendid book, Presidential Economics. What I have learned or re-learned is that Reagan was confronted with a giant problem in his 1980 campaign.
The problem was budget deficits from the Johnson/Nixon/Ford/Carter years along with high inflation and a stubbornly high unemployment rate.
The conventional economic advice called for raising taxes or monetary restraint to lower the inflation. But the problem there was that those measures would almost surely also generate higher unemployment.
Along came what my father calls "the economics of joy," which was supply-side economics. This promised that lowering taxes would create so much more labor in the economy and so much higher productivity that employment would grow, output would grow, and everything would be taken care of without having more unemployment. Also, the supply-siders said that lower taxes would raise output so much that the budget deficit would disappear as higher economic output generated more tax revenue at lower rates.
My father does some math so show that the supply-siders' hoped-for addition to hours worked would have been basically impossible on a scale sufficient to balance the budget or offset the lower tax rates. There just were not enough hours in a year to do it.
However, Presidents are not supposed to delve into small details and so Mr. Reagan thought that the supply-siders were right and he got a major tax cut passed.
The result was worse unemployment and larger deficits.
However, Ronald Reagan was a highly intelligent, adaptive President. He raised taxes, signaled his intention to raise them enough to keep the budget deficit under control, and the economy revived magnificently. Alas, the deficit problem was very far from being solved.
(Excerpt) Read more at spectator.org ...
Inflation was above 10% when Reagan took office, and the Federal Reserve tightened monetary policy under Volcker to bring it down. That's what caused the recession early in Reagan's term, and it was unavoidable.
A classic example of Stein’s whining about his good life, from the same column:
“Frankly, I am getting old and tired and cannot handle all of the homes I have much longer. Maybe I will sell them all and just live with my big wifey in the one in Malibu. No swimming pool, but we can get one put in. Then it would be perfect.”
This is beyond parody.
So Ben Stein is a “Tax You(not me) More” Hollywood liberal
The recession started in 1980. Reagan was not President for even one day in 1980, and his tax cuts did not take effect until 1983.
.....haven’t seen him on FOX as often as he has been in the past....a clear sign he’s been brought.
Ben needs to get the red out.
Ben needs to get the red out.
The great Ronaldus Magnus inherited a FAR worse economy from Mr. Peanut Carter than Comrade Ozero did from Bush43:
-Double digit unemployment
-Double digit inflation
-Prime interest > 20%
-Mortgage 30yr interest > 18%
After 1 year of passing his tax rate cuts, Reagan’s GDP was soaring @ 8.5%
Comrade’s BIG GOVT Porkulus results:
-GDP in 1Q/11 = 0.4%
-Unemployment (U6) = 16%
Why doesn’t Ben stick to the topics he knows something about, like his dogs and his meds and his neuroses and his rich pals’ hospitality and his fear of growing old and his guilt about being rich himself, and etc..........
Now, in 1978 he wrote an absolutely first rate book about venality and leftwing hypocrisy in Hollywood called “The View from Sunset Boulevard”. Of course, that was an update IMO of Eugene Lyon’s classic “The Red Decade” (1940).
Ben was a superb muckraker once, but wealth and ease have left him a changed man. His idelogy changed, too, like so many who attain affluence and think it was just pure luck and they don’t really deserve it and skew leftward to assuage their guilt.
Ben Stein is a progressive in conservative clothing. Beware.
Ronald Reagan wasn’t inaugurated until Jan, 1981. The recession started in 1980. How can this clown blame Rreagan for a recession that was already in progress because of the progressive politics of Carter and his administration and a Democratic congress? Carter lost re-election because the economy sucked wind for his entire four years.
During Jimmy Carter’s last year in office (1980), inflation averaged 12.5%, compared to 4.4% during Reagan’s last year in office (1988). Over those eight years, the unemployment rate declined from 7.1% to 5.5%, hitting annual rate highs of 9.7% (1982) and 9.6% (1983) and averaging 7.5% during Reagan’s administration.
Next thing you know the RATS will be blaming GW or Reagan for the Crucifixion of Jesus.
That’s “ideology”. Geez...........
I guess “idelogy” would be the study of events which occur around the middle of March.
His father was in charge of "Wage and Price Controls" for Nixon.
The apple doesn't fall far from the tree.
Sounds like history is reating itself. If so, Keep Hope Alive!.
“RATS will be blaming GW or Reagan for the Crucifixion of Jesus.”
I’m sure that in Reverend Wright’s church, it is taught that Jesus died preemptively for Reagan’s “sin” of showing progressives how wrong-headed their views about domestic and foreign policy were, again, and again, and again.
Jews are almost always dimocrats.
Lol, nicely put.
“The recession started in 1980. Reagan was not President for even one day in 1980, and his tax cuts did not take effect until 1983.”
Really, Ben? So the term, "gridlock", which was the Libturd Media buzzword for The Reagan Administration was coined because Reagan wanted to raise taxes more than the RATS in The House and Senate did?
Ben Stein is SUCH a moron.
Tax rates were lowered. Revenue increased. Spending increased more than revenue - thus deficits increased.
Blame the tax rate lowering!!!!
Just when I thought I couldn’t possibly lose more respect for the moron.
Expelled!!! No intelligence in evidence.
His comments on Reaganism shows that he, Stein, no longer lives
in the real world, worse, forgot the history he lived through,
and has completely immersed himself into the moral relativism
If he still goes to temple, I wonder if his rabbi is a Jewish Jeremiah Wright?
Exactly. The Wall Street Journal editorial for the first edition of 1983 was entitled something like “FINALLY, A TAX CUT.” The Dow bottomed out at about 700 in the fall of 1982. From then on, it soard as high as 2700. then the Dems took the Senate in 1987, and the Dow fell to 2200 in October of 1987. The next two days, Thursday and Friday, it lost about 100 each day, leaving investors to panic over the weekend. Monday was Black Monday. The next two days the Dow fell to about 1200, but it recovered by the end of the year.
It’s funny how the libs always choose to ignore the Carter 70s as though they never happened.
It can't be said enough. That didn't stop the Democrats (or Ben Stein, apparently) from blaming Reagan's tax cuts -- which hadn't even taken effect yet!
Reagan is the only president to have had an economics degree. And he'd received his education in the twenties before Keynesian nonsense had infected academia. He understood the dangers of inflation and let Volcker shrink the money supply even though it hurt him politically.
In 1983, Volcker eased and the final tranche of Reagan's tax cuts took effect. The economy soared almost instantly.
Ben Stein used to be interesting to read. Something's happened, though. He's now just a flat-out liar.
Ben Stein: So Conservative, He Not Only Endorsed Al Franken But Also Conributed To Franken’s Campaign!
Thanks for putting Franken over the top, Ben, you big conservative, you.
I thought taxes weren’t raised till 1986 when the Democrats screwed us over (yet again).