Reaganomics Vs. Obamanomics:

Excellent advice on how to manage a foundering economy

http://blogs.forbes.com/peterferrara/20 ... d-figures/

That's a very cool article on differences in policy.

This is also why I believe we are stuck in a bad economy while many parts of the world are now out of recession and growing fast again.

Reagan also inherited a very bad economy - and promptly did what was necessary to pull us out of it.

God bless Ronald Reagan.

Yet I don't remember Reagan crying constantly about the economy he inherited.

Even though it was worse than the current admin has to deal with.

of course not....back then he was allowed to raise taxes....now we want the president to pull us out of a recession without raising taxes, and we blame him because without the ability to increase revenue as Reagan did the recovery is slower.

After Reagan's first year in office, the annual deficit was 2.6% of gross domestic product. But it hit a high of 6% in 1983, stayed in the 5% range for the next three years, and fell to 3.1% by 1988. (By comparison, this year it's projected to be 9% but is expected to drop considerably thereafter.)

So, despite his public opposition to higher taxes, Reagan ended up signing off on several measures intended to raise more revenue.

"Reagan was certainly a tax cutter legislatively, emotionally and ideologically. But for a variety of political reasons, it was hard for him to ignore the cost of his tax cuts," said tax historian Joseph Thorndike.

Two bills passed in 1982 and 1984 together "constituted the biggest tax increase ever enacted during peacetime," Thorndike said.

http://money.cnn.com/2010/09/08/news/ec ... /index.htm

Removed duplicate post.

archer wrote: of course not....back then he was allowed to raise taxes....now we want the president to pull us out of a recession without raising taxes, and we blame him because without the ability to increase revenue as Reagan did the recovery is slower.

After Reagan's first year in office, the annual deficit was 2.6% of gross domestic product. But it hit a high of 6% in 1983, stayed in the 5% range for the next three years, and fell to 3.1% by 1988. (By comparison, this year it's projected to be 9% but is expected to drop considerably thereafter.)

So, despite his public opposition to higher taxes, Reagan ended up signing off on several measures intended to raise more revenue.

"Reagan was certainly a tax cutter legislatively, emotionally and ideologically. But for a variety of political reasons, it was hard for him to ignore the cost of his tax cuts," said tax historian Joseph Thorndike.

Two bills passed in 1982 and 1984 together "constituted the biggest tax increase ever enacted during peacetime," Thorndike said.

http://money.cnn.com/2010/09/08/news/ec ... /index.htm

There you go. A leader facing reality and having the gumption to do something about it. At least the people knew they were getting hammered. Obama ought to try that sometime. He is afraid because of his political ambitions. He wants 4 more years in order to have a better chance of turing the US into a welfare country, or at least into a socialistic country.

Everyone needs to grow upand realize it will take both spending cuts AND tax oncreases to pay off thos deficit. As long as talking points and scoring points count for more than doing the hard work of fixing the economy we are all screwed.

Rockdoc Franz wrote: There you go. A leader facing reality and having the gumption to do something about it. At least the people knew they were getting hammered. Obama ought to try that sometime. He is afraid because of his political ambitions. He wants 4 more years in order to have a better chance of turing the US into a welfare country, or at least into a socialistic country.

Nice spin, but Obama is a realist and he knows that no way will the Republicans, and some of the democrats, allow a raise in taxes. The president does not make the laws....he can ask, he can suggest....but he cannot make a law. The US population has been bombarded over the last decade with the "cut taxes" mantra of the Republicans and now the tea party, they think that any raise in taxes will send the country into a decline. Even 20 years ago people were willing to sacrifice for the general welfare of the nation....now they have been told by the Republicans they don't have to, taxes should be cut, then cut some more, then cut again.....so any thoughts of raising taxes will never get through congress or resonate with the American People. Obama couldn't even get agreement on eliminating the tax cuts on the wealthiest 1% of this country.

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 in income tax rates for everyone. The 1986 tax reform then reduced tax rates further, leaving just two rates, 28% and 15%.

2. Spending reductions, including a $31 billion cut in spending in 1981, close to 5% of the federal budget then, or the equivalent of about $175 billion in spending cuts for the year today. In constant dollars, nondefense discretionary spending declined by 14.4% from 1981 to 1982, and by 16.8% from 1981 to 1983. Moreover, in constant dollars, this nondefense discretionary spending never returned to its 1981 level for the rest of Reagan’s two terms! Even with the Reagan defense buildup, which won the Cold War without firing a shot, total federal spending declined from a high of 23.5% of GDP in 1983 to 21.3% in 1988 and 21.2% in 1989. That’s a real reduction in the size of government relative to the economy of 10%.

3. Anti-inflation monetary policy restraining money supply growth compared to demand, to maintain a stronger, more stable dollar value.

4. Deregulation, which saved consumers an estimated $100 billion per year in lower prices. Reagan’s first executive order, in fact, eliminated price controls on oil and natural gas. Production soared, and aided by a strong dollar the price of oil declined by more than 50%.