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February 12, 2009

Downside of Reaganomics

Mark Robertson’s letter (2/7, “Reaganomics worked”) was well researched and generally correct except for one important omission. He forgot to mention that during Reagan’s eight years in office, our national debt nearly tripled, primarily because federal spending soared. Predictably, the combination of lower tax rates and increased spending gave our economy a boost, but we’re paying the price today.

The current stimulus package dwarfs anything we’ve done since the New Deal, and it will have serious long-term consequences. The national debt as a percentage of gross domestic product is approaching a level not seen since the early 1950s, in the aftermath of World War II.

There is no easy way out of this. At some point we’ll need to increase taxes, cut spending, or both. I just hope that when the current recession ends our elected officials will have the intelligence and courage to do the right thing.

Mike Mendon
Gladstone

“There are lies, damned lies and statistics.” Whoever first uttered that phrase must have tutored the defenders of Reaganomics.

At Ronald Reagan’s inauguration: Sky high interest rates? Given. Soaring inflation? Yeah. Climbing unemployment? Maybe.

But here is where reality intrudes and this situation is different. There was no war, no collapsing stock market, no epidemic of foreclosures spreading like wildfire, no plethora of large corporations cutting jobs like a barber in boot camp and no bevy of financial pirates grabbing their booty and scurrying like cockroaches for cover. Some clam that tax cuts and deregulation worked wonders in the 1980s. Perhaps, but most likely the rich just got richer and seeds were sown for our current woes.

Is Reaganomics the right thing for 2009? No. Barack Obama must oversee a process that stops the bleeding and starts the healing. What the defenders of Reaganomics refuse to acknowledge is that the bleeding was caused by years of financial system abuse by a lot of people who utter the mantra of Reaganomics while they line their own pockets.

Tracy Leonard
Kansas City

Comments

Pub 17

Engineer, once again you're forming sentences that will diagram perfectly but don't mean a damn thing. It's the Bart Simpson defense: I didn't do it, nobody saw me do it, you can't prove I did it. At one point the Republican Party stood for something. Being a Republican meant being kinda boring but at least being responsible and taking responsbility for your actions. I don't recall Eisenhower blaming everything on Truman or the Democrats that were thwarting him in his mission; that business started with Reagan, the original empty suit. Give it a rest and go watch TV.

Engineer

Pub 17
He could not have vetoed the social spending and got the house to appropriate the funds he needed to defeat the USSR. As the Democratic Party controlled House appropriated and voted to spend every cent spent they are fully as responsible as is RR.

Pub 17

And Reagan could have vetoed every budget that came through bloated and increasing the national debt. He didn't. He was responsible for the increase in national debt as he was responsible for the sextupling of the California budget while he was governor.

Engineer

Pub 17
I'm not sure what you are trying to say about the House. There is no way in which Reagan could control it, so he had to go along with it on some things if he wanted to get others done. The House controls the purse strings, the House was controlled by the Democratic Party, and as they were in control of the funds, the Democratic Party authorized and approved every cent spent under the Reagan Administration. RR was a very effective president. Let us hope the "current occupant" can do half as well.

Pub 17

The House, Engineer. Even under Reagan you couldn't filibuster in the House. That makes Reagan responsible for the course of his Presidency. Unless, of course, you're willing to argue that Reagan wasn't responsible for his many failures, and by extension can't claim credit for any of his successes.

Engineer

JayhawkinMO
Under Reagan and G.H.W. Bush the Democratic Party controlled the House. RR understood that the USSR was a grave threat to the US, but to get the Democratic Party controlled House to give him the means to oppose it, he had to go along with their social spending. At that time the Democratic Party still numbered in its ranks some of those who Stalin characterized as "useful idiots" and at least one Congressman from California who would have been happy to have been the first Soviet Commissar of the US.

Marctnts

Pub,

I'll give you that Bush's rating was lower than Carter's in the NYT poll, and admit that both these numbers were from the same polling source. I think I was still responding to your previous "lower rating than any president in history" comments, and as even the NYT poll admits if you look at the back-up, the remaining ratings come from Gallop (so Gallup is the one you should use for consistency).

Either way, yes, his approval rating were very poor, and probably well deserved in many aspects.

Pub 17

Marctnts
Choosing Gallup is as much cherrypicking as using NYT/CBS. At best, Bush left office as unpopular as Carter. That, bei sich, is a good thing?

whispering_to_kc

Reagan had Alzheimers and he was beginning to show its early effects his last years in office. That much was obvious even at the time and it's much more clear looking back in hindsight.

Looking at Reaganomics through the lens of Alzheimers is the only way to explain the "success" of his voodoo economics.

Reagan began the war on middle-class America. It's closing battles are being played out today.

Casady

I don't think anyone can argue that the economy was in better shape after Reagan left office than when he came. However, I think that had as much to do with the Fed finally gaining a foothold on the lag factors associated with open market operations as it did with Reagan tax cuts. The shift of employment from our decaying industrial base to the service and tech sectors also played a key role and that was not necessarily engineered on a national level. Yes, Reagan was good, but he wasn't God. Similarly, Carter wasn't great but he definitely took the rap for previous administrations that chose to finance massive federal programs and wars by running the Treasury printing presses. Also note that when Reagan left office, national debt as a percentage of GDP was was about 50% higher than when Carter left office so yes, his agenda indeed did carry a high price tag.

Marctnts

"In any case, Carter left office with a miserable 44% approval rating, didn't he? Oh, BTW, Bush left with a 22% approval rating."

Uh, again with this? Like we've already discussed, the only way to get these numbers is to use different polling sources with limited historical data (cherry-picking), because when you look at the data from the only consistent polling organization (Gallop), both Bush's and Carter's approval numbers were equal at 34% when they left office.

JayhawkinMO

In the 80s, Reagan got his defense spending and the Dems got their domestic programs. During at least three years then, annual budget deficits totaled over $200 billion, records at the time. Bush 43 along with the Reep-controlled Congress continued Reagan's legacy of deficits... combined with the largest Medicare bill in history...

Pub 17

Wow, pass the pipe. Reagan fought the Democrats who controlled the House and Senate tooth and nail, vetoed every spending bill they sent him, and lobbied hard against all budget increases. We knew he'd do this because he'd dramatically reduced spending as Governor of California. At the end of his two terms he'd given us the longest peacetime economic recovery in the history of the country. And he did this by reducing all taxes so that every worker took home more real income with each paycheck.

EVERY SENTENCE IN THE PRECEDING IS A LIE, except the fact that you need to pass the pipe, Rouge.

BudRog

Uh, Pubes, the President proposes, the Congress disposes, a Dumbocrat Congress went nuts on the spending like I said.

And, the famous misery index created by Carter included double digit interest rates, unemployment rates, and inflation rates, look it up.

And putkids, the only union Reagan destroyed was the ATC and rightfully so....

putkidsfirst

Reagan destroyed our unions. Strong unions are necessary for a thriving middle class.

In 1980, household income was roughly equivalent to what it is today. Only difference is in 1980, one earner supported a household and now there are almost always at least two. So our paychecks go about half as far as they did before Reagan took office.

Another important point when talking about Reagan is that before 1980, we used our raw materials to manufacture and export goods. Today our raw materials are owned by foreigh countries so we export raw materials and import manufactured goods. Not a good trade balance. And we can thank Reaganomics.

Pub 17

Double digit unemployment? Wrong again. Reagan "saved" the country by tripling the national debt through unfunded spending. Run it up on the national credit card, girls, we can always blame it on Carter.

In any case, Carter left office with a miserable 44% approval rating, didn't he? Oh, BTW, Bush left with a 22% approval rating.

BudRog

"Soaring unemployment, sky high interest rates, Maybe?"

Uh Tracy I was there duing Jimma days, no maybe about it. The Prime Rate at 18%, double digit unemployment and double digit inflation was a fact.

Ronaldus Magnue saved this country no doubt about it, the only problem was the dumbocrats spending the treasury before we could collect it.

Sort of like todays 1 Trillion plus Porkulous bill.

Pub 17

But...but...but...Dick Cheney said "Deficits don't matter, Reagan proved that."

Ike Eisenhower finally got sick of this crap and started registering Democrat in 2005, in case you hadn't heard.

whispering_to_kc

MR will be along soon to present his faith-based defense of Reaganomics and eviscerate the Reagan blasphemers, Mark and Tracy, for their collective heresy.

MR's lies, damned lies and statistics called on for the above activities originate with the Frasier Institute, National Review and Rush Limbaugh. Who can argue with sources like those!?

Ask MR about his other conservative heroes, Calvin Coolidge and Barry Goldwater. But please, whatever you do, don't get him started on FDR and the New Deal.

 
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