Posted on 04/28/2014 1:03:14 PM PDT by LucianOfSamasota
Reagan Turned It Around in Two Years;
Obama Has Made It Worse in Five Years
It’s a tired and shopworn refrain, but the Obama administration still claims that the so-called economic recovery that started in 2009 is struggling because of the mess the president inherited when he took office. So how does he explain a jobless recovery with no economic growth?
We’ll probably never see it in the mainstream media, but thanks to political observer Michael Hausam, we can make a comparison of policy and politics that pits 2009 against 1981. That would directly compare the economy Ronald Reagan inherited against the one inherited by Barack Obama.
Reagan was handed a bigger mess than Obama. When Reagan took office, unemployment was 10.8 percent; inflation was 13.5 percent; the prime interest rate was 21.5 percent. The economy was on the ropes.
When Obama took office, unemployment was 7.7 percent; inflation was 2.7 percent; the prime interest rate was 3.25 percent.
The economy was sputtering.
(Excerpt) Read more at westernfreepress.com ...
Reagan was pre-NAFTA.
“The fact was, due to the efforts of myself and my supply-side compatriots, Ronald Reagan had been made to stumble into the wrong camp on the eve of his final, successful quest for the presidency. He was a consensus politician, not an ideologue. He had no business trying to make a revolution because it wasn’t in his bones.”
David Stockman is a self serving liar. If you want an accurate account of Ronald Reagan’s belief in his economic program read Martin Anderson’s memoir ‘Revolution’. Anderson was with Reagan from his time as Governor and was one of President Reagan’s principle economic advisers.
In one lengthy portion of ‘Revolution’ Anderson says that the Reagan team never made the Laffer curve claim that “tax cuts would increase tax revenue”, they didn’t believe it, and it didn’t happen. What did happen is that economic growth recouped around two thirds of the tax revenue loss predicted by static analysis. And that was what the Reagan team had predicted.
The Reagan program did include spending cuts but Democratic Speaker Tip O’Neil reneged on the cuts after agreeing to them. O’Neil’s bad faith , a very rapid collapse of inflation, and the decision to break the back of the Soviet Union by means of defense spending generated the Reagan deficits.
Go away, commie pig.
“Professor (Arthur) Laffer’s contribution was to hold that with such a reduction in taxes, aggregate government revenues would not diminish but increase. This was an especially valuable example of the role of justifying doctrine, however removed from fact.”
That’s nice. But Art Laffer had a private practice during the 1980s and did not work for President Reagan. He had a small role as part of a group of outside economic advisers.
The actual Reagan economists didn’t believe that the Reagan tax cuts would increase tax revenue and didn’t base their program on that idea.
Government never has been and never will be a wealth-creating agent. Government is an agent for poverty. It siphons (steals) resources from the people, pays bureaucrats to do a bunch of non-productive, useless stuff who then turn around and regulate anything that moves and WHEN (not if) their programs fail (they ALWAYS FAIL), they ask for more money.
Bureaucracies and bureaucrats quickly forget the "altruistic" "intentions" for which they were created. Government agencies, departments are as self-interested as private enterprise if not more so. Why not? There's really no "government." There's only people in government, just like you and I who want to keep their jobs and want to see their departments grow so they can get bigger paychecks. Self-interest and greed is most prevalent in government because it contains another element: coercive power - the kind that corrupts "absolutely".
Central command and control has never and can never come close to replacing the dynamic, wealth-creating trillions of moving parts and people in the voluntary free market run by the opportunities of the supply and demand of the free economy. Coercive and oppressive big government violates the very essence of human makeup - his self interest. The difference between collectivism and the free market is collectivism runs counter to human incentive by using force whereas the free market is RUN by voluntary self-interest. That's one main reason why freedom works and tyranny fails.
“Reagan inherited a mess, but instead of whining, he got to work and fixed it. It took a couple of years for his policies to take affect, but when they did, the economy did very well. barry inherited a smaller mess and has made it much worse.”
I don’t know that Obama inherited a smaller mess but it is certainly much different than the stagflation that Reagan had to deal with.
Reagan’s team correctly deduced that the economy was suffering from a supply constraint. As long as this was the case any increase in the money supply would go to pure inflation. The solution was to shift the supply curve to the right and a program of regulatory relief and tax cuts allowed this to occur.
Obama’s economic program is driven by politics, not by a desire to improve the life of the American middle class. He’s a leftist, a socialist, a small ‘c’ communist, whatever you want to call a politician for whom controlling everybody is the highest goal. He is making the economy worse, but I suspect that he is just fine with that outcome.
“Tax cuts are hardly Keynesian. Keynes is used by the socialists to justify INCREASED SPENDING, never tax cuts.”
Actually they are. The real Keynes was not a Keynesian. He advocated tax cuts and government spending only during times of deflationary crisis, like the Great Depression. He believed in balanced budgets otherwise. He was not a socialist. Many who have claimed his name are.
Yet if you listen to the Media, this recovery is phenomenal!!
They will also tell you that the Reagan recovery was a myth and that Obama has reduced the deficit, lowered the debt and been the most financially responsible President since FDR.
Everyone would know that Obama’s economic policies were a failure if the Media would TELL THE TRUTH!
However, I doubt you will see this comparison on ANY of the alphabet networks, including Fox.
This country will continue to circle the drain economically as long as the Media is hell bent on destroying this nation!
“Reagan’s tax reform didn’t actually lower the revenue collected by government. It merely changed the math”
I think it lowered collections by about one third, the data can be found in Lawrence Lindsey’s ‘The Growth Experiment’.
That one third loss was expected by Reagan’s team and is the reason they asked Tip O’Neil for spending cuts.
There is only one instance in which tax cuts paid for themselves and in fact increased revenue. That is when capital gains rates were cut, and ironically that was a bill signed by Jimmy Carter.
President Obama inherited a mess of his party's own making, including his own.
How the Democrats Created the Financial Crisis: Kevin Hassett
Bill Clinton blames Democrats for the mortgage mess
With landmark lawsuit, Barack Obama pushed banks to give subprime loans to Chicago’s African-Americans
So yes, President Obama did inherit a mess, from Senator Obama and attorney at law Obama.
I also hate government-centered titles they give to tax-cuts like "supply side" (good theory but the name smacks of "government speak") or "trickle down" as though our hard-earned money belongs to the government who allows it to "trickle down" back to us. What an outrage. I suppose it's indicative of our slavish need to sort of beg and convince government not to steal so much of our money. I hope the CoC by CSG works to fix this nonsense.
And that's just the moral view. The economic advantages of low, flat taxes are staggering.
DemocraticUnderground.com. The home of leftist insanity on the internet. Go look, but be prepared for a freak show of the sort you would never have guessed existed in a civilized, capitalist society. The website is pretty well known on the web, and is often satirized by PJComix2 and Charles Hendrickson on this website (FR).
“I can’t understand anyone on the Right not understanding the GREAT VALUE of tax cuts. It is the single most dynamic thing you can do to unleash the wealth-creating free market economy.”
It depends on the disease the economy is suffering from. The bigger problem now could be business activity being strangled by government agencies. I knew a radical college professor who used to take sabbaticals and go to work for the BLM. Once inside the BLM he could cause all sorts of grief for private business. You can be certain he isn’t the only radical professor who does this.
Reagan’s was BECAUSE OF Reagan. His wealth-creating tax-cut polices lead to an historic 25-year economic expansion.
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well Reagan also talked the Saudis into overproducing oil and therefor collapsing the price of oil. This bankrupted the old soviet union but it also turned out to be pure oxygen for the US economy which grew like gang busters because of cheap energy.
” Socialists use “Keynes” but really it’s their misapplied “Keynesian” theory to justify big government.”
Quite so. There’s a funny story about Keynes being invited to speak to a meeting of ‘Keynesians’. Returning home after the meeting Keynes told his Russian ballerina wife: “I was the only non-Keynesian there”.
Those are happy things also, but the tax cuts were the locomotive engine fueled by people keeping more their own hard-earned money and plowing it into the free market.
Good one. That is funny.
Reagan’s team correctly deduced that the economy was suffering from a supply constraint. As long as this was the case any increase in the money supply would go to pure inflation. The solution was to shift the supply curve to the right and a program of regulatory relief and tax cuts allowed this to occur.
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I don’t think that the role of cheap oil should be underestimated. Reagan talked the Saudis into jacking up supply of oil and collapsing the price. That bankrupted the old soviet union—which was dependent then as now on oil revenue to fund the government. But cheap oil in the 1980’s also was pure oxygen to the US economy.
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Obama’s economic program is driven by politics, not by a desire to improve the life of the American middle class. He’s a leftist, a socialist, a small ‘c’ communist, whatever you want to call a politician for whom controlling everybody is the highest goal. He is making the economy worse, but I suspect that he is just fine with that outcome.
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Awful thing is that the USA fracking revolution is going to make Obama look good whether he likes it or not and despite his best efforts to kill it. The fracking revolution will cover over Obama’s worst sins. The economy may not do much but it won’t go down. Not when the USA is producing a million barrels@day more each year for the last three years. The IEA is predicting million barrel annual increases for 2014 and 2015. A five year run like this bigger than the great russian run from 2003-2006 that reversed Reagan’s work in the 1980. A five year run is as big as the great Saudi oil expansion from 1968-1973. But I think the IEA is off by about three years. I think the run will go for 8 years. I think there will be million barrel@day expansions annually through 2018. Why? Because the drillers have only begun to horizontal drill in the Permian basin.
The upshot of this for Obama is that the economy will not be great but it will be good enough to get him to nearly a balanced budget by the time he leaves office.
He will take the credit for it even though he had nothing to do with it and what efforts he did make were to stymie it at every turn.
Curiously the same thing happened during the Clinton years.
The history of “supply-side” is quite interesting. It was being kicked around during the Carter years when stagflation demonstrated that the Fed’s old standby of goosing the economy with easy money was no longer working. Instead of stimulating growth we just got inflation.
Some economists working as Congressional staff began shopping their ideas around and in the House they found followers in Republicans Jack Kemp and Marjorie Holt. But the Senate is even more interesting. Three Senators signed on- Lloyd Benson, Russell Long, and Sam Nunn, Democrats all.
When candidate Reagan latched onto supply side the Democrat Senators considered passing it before the election in order to steal the issue from him. But they figured that might look like an endorsement of Reagan so they decided to wait until after the election to pass it. Reagan won the election, Democrats lost the Senate, and Reagan encountered more opposition to supply side from Republicans than he did from Democrats.
Today all sorts of claims get made about Reagan’s supply side tax cuts, exaggerated ones by boosters on the right and utterly false ones by critics on the left. But it did exactly what it was designed to do, which was just one thing: end stagflation.
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