« Stopping the violence in ‘Murder Factory’ | Main | ‘Bone-strengthening’ drugs »

February 06, 2009

Reaganomics worked

Reporter Dave Helling implies that Republicans following former President Ronald Reagan’s example of cutting tax rates would increase deficits, and he said “it isn’t clear” whether Reagan’s tax cuts reduced unemployment (2/1, A-1, “Do we need a jolt?”).

Reagan inherited 20 percent interest rates, 13 percent inflation and 10 percent unemployment. His across-the-board tax rate reduction and deregulation brought on an economic boom that created 19 million jobs in the ’80s and 20 million more in the ’90s. There were 92 months of uninterrupted economic growth, interest rates dropped to single digits, inflation dropped to 3 percent and then lower, family median income rose 11.3 percent and Treasury revenues nearly doubled from $550 billion in ’81 to $991 billion in ’89.

And the economy was nearly twice as bad then compared with today, contracting at 6.4 percent in the first quarter of ’82, versus 3.8 percent in the last quarter of 2008, a year when the economy actually grew at 1.3 percent overall.

The Democrats’ trillion-dollar, pork-loaded power grab they call a “stimulus” would be catastrophic. Government spending has never brought real prosperity.

Reagan showed the way to deal with a tough economy in times much tougher than ours.

Mark S. Robertson
Independence

Comments

Mark Robertson

And the old Nazi ploy. When the facts aren't there, that comes in handy for some on the left when speaking of conservatives and/or Republicans. Just ask President Bush.
By the way 80% of the 19 million jobs created in the 80s were higher skilled jobs. (National Review, The Real Reagan Record, Aug 31, 1992) Thankyou

Mark Robertson
Indeependence

Mark Robertson

Rush Limbaugh's second book, "See I Told You So," had a record first printing for a non-fiction book(Don't tell me, it was fiction,right?)of 2,000,000 copies.(No Hillary's fictional autobiography didn't beat it) They sold in 8 weeks. His two books combined have sold over 9 million copies, and that was as of a number of years ago. Thankyou.

Mark Robertson
Independence

Mark Robertson

Every income quintile increased in the 80s. The rich got a little richer and the poor got much richer.(the liberal Urban Institute, Isabel Sawhill, Mark Condon)
Of the bottom 20% of earners in 79, 85.8% had climbed to the next or higher level by 88. 65% moved up to levels or more.(Treasury Dept.) Thankyou.

Mark Robertson
Independence.

Mark Robertson

The 1982 tax increase, the Tax Equity and Fiscal Responsibility Act, TEFRA, was an agreement that Reagan made with the Dems. He hated to raise taxes, but he wanted to cut spending, so he reluctantly agreed with the Dems to raise taxes one dollar for every three dollars in spending cuts. Reagan of course honored his end of the deal, but some 27 years later he is still waiting for those Dem spending cuts. He could trust but verify with the Soviets, but with the Dems he learned that he had to verify, period.
Plus, that tax increase came after a huge tax cut of course, Clinton raised taxes to take power from the "rich," and despite reports from the pathetic media, it actually slowed the economy in the early 90s.(Forbes and numerous other sources) Thankyou.

Mark Robertson
Independence

Mark Robertson
Independence

whispering_to_kc

Reagan's "shining city on a hill" was only a palace reserved for himself from which he could watch the rest of us serfs tend his fields below.

"But due to global capitalization American semi-skilled workers will never be able to command the wages they drew in the past."

I'm not sure what you mean by "capitalization".

If you're referring to the equipment and means of production behind each producer, it's not that the foreign operations have caught up to us. It's more often that we've tranferred our equipment overseas, stripping our industrial base as we build up someone else's. I've personally helped pack equipment into ISO containers for the overseas trips.

If you're referring to the free flow of money, what a shallow, short-sighted, selfish world you must live in. Since "capital" is increasingly concentrated with a lucky few, you're counting on a minority of us being better off financially even as most of us pay the price for their success and our prospects dim.

You're also being nearsighted if you think this only applies to "semi-skilled" Americans. I work in a professional business that's using more and more H1B Indians to do the work once done by now layed off Americans even as other work goes to India. Some of the layed off Americans might, if they're lucky, have the chance to return to their old jobs as perma-temps at reduced pay (trying to compete with the Indians) but many only wander away and disappear.

Reagan ended up dead. There's a lesson in that we could all learn something from.

Smarter Than You

Based on the “stimulus” package, our current President is a shining example to the American voter of unrequited love. Actually, Gloria Jones probably had a much better take on this corrupted affection.

Engineer

whispering_to_kc
Ronald Reagan took over an economy that was in worse shape than ours is today. If President Obama can do half as well we will all benefit. But due to global capitalization American semi-skilled workers will never be able to command the wages they drew in the past. In those days the capitalization behind their jobs was so much greater than that behind the jobs in the rest of the world that they were much more productive. This is no longer the case.

T. Hanson

I brought up his divorce because the Republicans need a reminder what really destroys marriages. It seems they forget that every now and then.

whispering_to_kc

The $550 and $991 billion figures seem to come from a 1993 Rush Limbaugh book, "See I Told You So", page 129.

Amazon ranks the Limbaugh book #999,799 but we know who bought at least one copy!!

"Facts are stubborn things" - Ronald Reagan.

whispering_to_kc

"... Treasury revenues nearly doubled from $550 billion in ’81 to $991 billion in ’89 ..."

Going from revenues of $550 to $991 billion represents an increase of 80%, a ways short of "nearly doubled".

The non-inflation adjusted OMB revenue figures for the period are $599 billion in '81 to $909 billion in '89. That's an increase of 52% over eight years and even further from "nearly doubled".

Adjusted for inflation and corrected to year 2000 dollars, the OMB revenue figures translate to $1077 billion in '81 and $1236 billion in '89. That's an increase of only 15% over eight years.

Well, who knows. Maybe Reagan will rise from the dead and show The Party to the Promised Land after all.

If you Google the $550 and $991 billion figures, the Google takes you to "RonaldReagan dot com" and Rush Limbaugh quotes. Now we know where Robertson is getting his "facts" from.

solomon

Ronald Reagan did not have a shady past at all. It wasn't until his presidency that he broke the law.

cooker_fox

Posted on the wrong thread.

http://www.dailyhowler.com/dh060804.shtml

“Ronald Reagan does hold a special place in the annals of tax policy, and not just as the patron saint of tax cuts,” Krugman writes. Krugman notes that Reagan “followed his huge 1981 tax cut with two large tax increases.” Here’s the skinny on Reagan Tax Increase number 1:

KRUGMAN: The first Reagan tax increase came in 1982. By then it was clear that the budget projections used to justify the 1981 tax cut were wildly optimistic. In response, Mr. Reagan agreed to a sharp rollback of corporate tax cuts, and a smaller rollback of individual income tax cuts. Over all, the 1982 tax increase undid about a third of the 1981 cut; as a share of G.D.P., the increase was substantially larger than Mr. Clinton’s 1993 tax increase.

We’ll return to that highlighted point. For the record, here’s Krugman’s description of Reagan Tax Increase 2:

KRUGMAN: I’m referring to the Social Security Reform Act of 1983, which followed the recommendations of a commission led by Alan Greenspan. Its key provision was an increase in the payroll tax that pays for Social Security and Medicare hospital insurance.

For many middle- and low-income families, this tax increase more than undid any gains from Mr. Reagan's income tax cuts. In 1980, according to Congressional Budget Office estimates, middle-income families with children paid 8.2 percent of their income in income taxes, and 9.5 percent in payroll taxes. By 1988 the income tax share was down to 6.6 percent—but the payroll tax share was up to 11.8 percent, and the combined burden was up, not down.

viet-vet1970

The sun came up every morning that Ronald Reagan was president. Were his economic policies responsible for that too?

JUNGLE JACK

T. - so does divorce qualify as a "shady past"? At least the guy paid his freakin' taxes.

The whole point is that most Reps today think they have to go the way of McCain to be successful. Pandering to the middle and undercutting those in your own party - as well as your base - does little more than garner you some glowing remarks in the NY Times. It doesn't win an election.

T. Hanson

Regan who? How bout you right wingers stop looking at a former Hollywood star that divorced his wife and look to the future, Please!!!

We need to get out of this and so far the Democrats have not found the traction control switch. The whole reason why they are in power now is because the RNC could not find decent leadership! Stop looking back at your poster child and show me someone new.

JayhawkinMO

Robertson and the rest of the troglodytes ignore the fact that Democrats held sway with the purse strings in the 80s. Reagan got his defense spending which eventually ran the USSR into the ground, and the Dems got their programs with Ronald's blessing. Three of Reagan's years, we had record deficits of $200 billion or more. But the Teflon President came out of that smelling like a rose.

JUNGLE JACK

Unlike Reagan - Bush for a time had a friendly Congress with which to deal. Instead of reigning in spending, his form of "compassionate conservatism" excess has devastated the Republican Party. No wonder Obama was so kind to W after the election - he knows who's responsible for his success.

BudRog

Nice try Horsey but you can't rewrite history. Revenus were at a record when Reagan cut taxes, however the Dems,as uausl, spent it faster than they could collect it! Like I said Nice Try.

Perhaps you remember Jimma days? Doulbe digit inflation, interest rates, and unemployment rates. Get braced we are now in the second term of Jimma.

whispering_to_kc

When you watch the old newsreels of the Nazis cheering on Adolph, you'd like to think that kind of human behavior was all well behind us and would never be repeated.

Then, someone like Robertson shows up every once in a while to prove humans never really change. Robertson seems to be waiting for Reagan's Second Coming though. I don't think even the Nazis went that crazy for Adolph.

Reagan inherited a $1 trillion public debt and turned it into $3 trillion of debt by the time he left office.

Dubya did Reagan better and turned a $5 trillion public debt into $10 trillion of debt.

Of the current $10 trillion public debt, Reagan and Bush2 are responsible for 3/4 of it and the combined efforts of the two to make the rich even richer may soon bankrupt the nation.

It should come as no surprise that Robertson is channelling Sean Hannity by claiming that Reagan "nearly doubled" Treasury revenues ...

http://mediamatters.org/items/200509160008

Reagan began the transition of middle-class Americans into the working poor. Dubya shifted the transition into overdrive.

 
About KansasCity.com | About the Real Cities Network | Terms of Use & Privacy Statement | About Knight Ridder | Copyright