17 months is all it took

[ilia25]

I keep asking for a link, do you have one??

This is how Fed created the Reagan's recession (by rising rates to 20%), and how it stopped it (by lowering them to 10%):

This is why the standard monetary policy was powerless in 2008 -- Fed started with much less room to lower the rates:

In 80's all the Fed HAD to do is lowering rates from 20% to 10%. In 2008 all the Fed COULD do is lowering rates from 5% to 0%, and that was not nearly enough for the economy to recover.

Ilia, you have it all ass backwards.

In October 1979, Volker radically changed Fed policy by allowing interest rates to float. To understand why he did this, it is necessary to understand what preceded this action.

In 1971, Nixon unpegged the dollar from gold.

Since the dollar was no longer pegged to gold, how did we keep the dollar a strong currency?

Well, we didn't. Congress fucked it all up.

You see, the Fed controlled the monetary supply, sort of. But the money supply was actually controlled by targets set by Congress. And Congress set targets that were political goals rather than sound fiscal goals.

So the Fed actually controlled only the federal funds rate. And it kept the federal funds rate rock steady.

But because Congress was printing money like there was no tomorrow, inflation began skyrocketing.

So Volker decided to use what power he had and stopped keeping the federal funds rate steady. He floated interest rates. This was an historical moment in financial history.

And thus the bond market went from a boring career for losers into the hotbed of activity it is today.

Rather then lowering the federal funds rate as you claimed, Volker raised it by 400 basis points to get inflation under control. And this led to a recession and high unemployment in January 1980. Which, of course, really pissed off Congress.

The fed funds flucuated wildly for while, leading to a second recession in 1981. Which pissed off Congress even more. It is hard to get re-elected when your constituents are unemployed.

But this had to be done to save the economy in the long run.

Volker's pllan ultimately worked to get inflation under control.

What Reagan gets credit for is that he was under tremendous pressure from Congress to return to the days of when Congress got to set the money supply. Congress had a crack monkey on its back and was demanding a fix. Reagan resisted this pressure and continued Volker's policy of floating interest rates. And he was proven correct in this policy.

It is for precisely this reason that idiots who want to "End the Fed" and return monetary control back to Congress are completely wrong. We would quickly return to the stagflation madness of the 70s.

With unemployment stuck at 8 percent, Congress would begin printing money like there was no tomorrow all over again. Much more than what the Fed has already printed.


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You've sure typed a lot of letters, but I don't get what points are you arguing with. Reagan's recession was created by the Fed, and it was ended by the Fed. You can credit Reagan for giving the Fed that freedom of action, but in the end all Reagan had to do is to sit back and watch.

Obama simply did not have that option.

 

[g5000]

You've sure typed a lot of letters, but I don't get what points are you arguing with. Reagan's recession was created by the Fed, and it was ended by the Fed. You can credit Reagan for giving the Fed that freedom of action, but in the end all Reagan had to do is to sit back and watch.

Anyone alive at that time, like me, knows just sitting back and watching was an incredibly difficult political decision to stick by. Reagan was heavily assailed for sticking to his guns.

Obama simply did not have that option.

Obama most certainly has options. You are admitting he does not know how to lead.

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[g5000]

You've sure typed a lot of letters, but I don't get what points are you arguing with. Reagan's recession was created by the Fed, and it was ended by the Fed. You can credit Reagan for giving the Fed that freedom of action, but in the end all Reagan had to do is to sit back and watch.

Obama simply did not have that option.

I have one more thought about this peculiar line of thinking.

You seem to think the Fed is the only institution capable of affecting the economy. In reality, the Fed has exhausted all of its bullets and only Congress and the President can do anything further to create an envirnoment conducive to growth. That is exactly why we are stuck, because Congress and Obama have their thumbs up their asses waiting for some kind of deus ex machina.

.

 

[JakeStarkey]

Sigh. Stop it. UE was at 10.8% in thre 33rd month of RR's presidency. The defense contracts kicked in by election time the following year, the rate was about 7.2%.

It took Reagan 17 months to straighten out Jimmy Carter's mess he left. Unemployment actually rose during the first months of his presidency to over 10% (sound familiar?) Inflation jumped to 13.5%

Bill Clinton lied last night saying no other president faced what Obama was facing. Reagan's was just as bad if not worse.

When Reagan took office the economy was one of the double-digit inflation and high interest rates. During the campaign Reagan promised to restore the free market from excessive government regulation and encourage private initiative and enterprise.

Reagan's economic policies came to be known as "Reaganomics," an attempt, according to Lou Cannon, to "balance the federal budget, increase defense spending, and cut income taxes." The President vowed to protect entitlement programs (such as Medicare and Social Security) while cutting the outlays for social programs by targeting "waste, fraud and abuse." Reagan embraced the theory of "supply side economics," which postulated that tax cuts encouraged economic expansion which in turn increased the government's revenue at a lower tax rate.

During his first year in office, Reagan engineered the passage of $39 billion in budget cuts into law, as well as a massive 25 percent tax cut spread over three years for individual, and faster write-offs for capital investment for business. At the same time, he insisted on, and for the most part, was successful in gaining increased funding for defense.

Although inflation dropped from 13.5% in 1980 to 5.1% in 1982, a severe recession set in, with unemployment exceeding 10% in October, 1982 for the first time in forty years. The administration modified its economic policy after two years by proposing selected tax increases and budget cuts to control rising deficits and higher interest rates. After the 1982 downturn, the reduced inflation rate (under 5% for the remainder of the administration) sparked record economic growth, and produced one of the lowest unemployment rates in modern U.S. history (unemployment hit a 14 year low in June of 1988). As Reagan left office, the nation was experiencing its sixth consecutive year of economic prosperity.

The economic gains, however, came at a cost of a record annual deficit and a ballooning national debt. The budget deficit was exacerbated by a trade deficit. Americans continued to buy more foreign-made goods than they were selling. Reagan, however adhered to his free trade stance, and signed an agreement to that effect with Canada. He also signed, reluctantly, trade legislation designed to open foreign markets to U.S. goods.

Ronald Reagan Presidential Library, National Archives and Records Administration

Reaganomics - Wikipedia, the free encyclopedia

 

[ilia25]

You've sure typed a lot of letters, but I don't get what points are you arguing with. Reagan's recession was created by the Fed, and it was ended by the Fed. You can credit Reagan for giving the Fed that freedom of action, but in the end all Reagan had to do is to sit back and watch.

Obama simply did not have that option.

I have one more thought about this peculiar line of thinking.

You seem to think the Fed is the only institution capable of affecting the economy.

I never said that. All I am saying is that Reagan could rely on the Fed in dealing with recession, and Obama could not. So comparing his problems with Reagan's would be unfair.

That said, I agree that Obama has not provided the leadership we were hoping for. He spent too much time trying to find a compromise with Republicans. He let them make the deficit reduction his first priority, ahead of restoring the economy and job creation.

Of course it does not make sense to vote for Republicans, who were basically sabotaging the recovery.

 

[Meister]

You've sure typed a lot of letters, but I don't get what points are you arguing with. Reagan's recession was created by the Fed, and it was ended by the Fed. You can credit Reagan for giving the Fed that freedom of action, but in the end all Reagan had to do is to sit back and watch.

Obama simply did not have that option.

I have one more thought about this peculiar line of thinking.

You seem to think the Fed is the only institution capable of affecting the economy.

I never said that. All I am saying is that Reagan could rely on the Fed in dealing with recession, and Obama could not. So comparing his problems with Reagan's would be unfair.

That said, I agree that Obama has not provided the leadership we were hoping for. He spent too much time trying to find a compromise with Republicans. He let them make the deficit reduction his first priority, ahead of restoring the economy and job creation.

Of course it does not make sense to vote for Republicans, who were basically sabotaging the recovery.

Here I thought that he made the first 13 months of his presidency focused on Obamacare.

 

[ilia25]

I have one more thought about this peculiar line of thinking.

You seem to think the Fed is the only institution capable of affecting the economy.

I never said that. All I am saying is that Reagan could rely on the Fed in dealing with recession, and Obama could not. So comparing his problems with Reagan's would be unfair.

That said, I agree that Obama has not provided the leadership we were hoping for. He spent too much time trying to find a compromise with Republicans. He let them make the deficit reduction his first priority, ahead of restoring the economy and job creation.

Of course it does not make sense to vote for Republicans, who were basically sabotaging the recovery.

Here I thought that he made the first 13 months of his presidency focused on Obamacare.

Obamacare never competed with plans for providing more stimulus, helping the state and local governments, etc. But focusing on the deficits called for exactly the opposite -- spending cuts. Which, of course, would put off the recovery even further away.

 

[naturegirl]

Obama's policies have failed. After four years we still have no jobs and are 6 trillion more in debt than before he took office. He spent TARP and came right back with a failed stimulus plan.

 

[JakeStarkey]

NatureGirl's stats failed. We want Romney elected, but pathetic lies like hers does not help.

 

[Politico]

For fucks sake, are you really this ignorant of the 1980 recession?

I don't know about you but I was there. And things had gone to shit long before 1980.

Bill Clinton lied last night saying no other president faced what Obama was facing. Reagan's was just as bad if not worse.

Now let's not be too quick to judge. Come January he will retroactively be right.

Gosh, you historical revisionists really make me nostalgic for the Reagan gas shortages

Talking about revisionism. Would all the folks who sat in gas lines during Reagan's tenure raise your hands please?

 

[JakeStarkey]

Reagan's recession was tough but not as tough as this one. I have been through both as well as the oil embargos. The bushies' wild west escapades domestically and internationally damn near broke the country. Obama has managed to not destroy the country but that is not enough. Romney is going to have to turn it around, or he will be a one-term president, and if he is, the changing demographics in our county will make the last Republican president in American history.

 

[naturegirl]

Reagan's recession was tough but not as tough as this one. I have been through both as well as the oil embargos. The bushies' wild west escapades domestically and internationally damn near broke the country. Obama has managed to not destroy the country but that is not enough. Romney is going to have to turn it around, or he will be a one-term president, and if he is, the changing demographics in our county will make the last Republican president in American history.

Sweetie, this one is harder because Washington has no clue how to end it. My stats didn't fail, Reagan fixed a worse economy in 17 months. That's why it wasn't as bad, you didn't feel it as much.

Just like FDR, Obama's policies are prolonging the recovery.

 

[JakeStarkey]

Your stats are false. RR's UE was 10.8% in October of 1983, in his 33rd and 34th months in office. RR's initial plans, just like FDR's, drove the economy even further down.

The defense spending (increased government spending) turned around the economy along with revenue hikes, after the tax cuts drove the economy further into the tank.

 

[Rozman]

Obama's policies have failed. After four years we still have no jobs and are 6 trillion more in debt than before he took office. He spent TARP and came right back with a failed stimulus plan.

Obama's policies have failed. After four years we still have no jobs and are 6 trillion more in debt than before he took office. He spent TARP and came right back with a failed stimulus plan.

But in Obamaland this is called a huge success...

 

[Darkwind]

Reagan was allowed to triple the debt to force a recovery. He did not have to contend with massive layoffs in the public sector while he was trying to cut the unemployment rate

masive layoffs in the public sector is a boon to economies.

Reagan wasn't allowed to do anything. He fought, tooth and nail, to get every inch he received. His running up the debt is was done the correct way.. He rebuilt a military that was decimated by Carter, all the while, stopping the criminal theft of the government.

Do you even fucking realize that under Carter, the top were only allowed to keep one dime of every dollar they earned?

That is beyond obscene.

 

[JakeStarkey]

What is real that Reagan was forced to increase taxes and defense spending by the Dems to begin the recovery. His tax cuts only prolonged the recession.

 

[naturegirl]

What is real that Reagan was forced to increase taxes and defense spending by the Dems to begin the recovery. His tax cuts only prolonged the recession.

You're sounding too much like Truthmatters now.

You don't get to rewrite history.

 

[Amazed]

It took Reagan 17 months to straighten out Jimmy Carter's mess he left. Unemployment actually rose during the first months of his presidency to over 10% (sound familiar?) Inflation jumped to 13.5%

For fucks sake, are you really this ignorant of the 1980 recession? It was a planned recession. Carter appointed Volker to impose monetary policy to bring down inflation. Volker did just that. He tightened up money to the point that no corporation could borrow its way out of the inflation spiral.

Reagan, blamed Carter for the problem, but actually kept Volker's policy in place, and even reappointed him.

Carter did what was right for America, and took the political hits for it. Reagan kept the policy and blamed others. Carter showed leadership. He put our Nation above his personal political ambition.

What a stupid fuck you are, and you'll believe anything to preserve your stupid fucking Keyensian BULLSHIT...Obama like Carter is a fucking failure...the single two worst Presidents of the modern era.

God you are an idiot.

 

[Amazed]

What is real that Reagan was forced to increase taxes and defense spending by the Dems to begin the recovery. His tax cuts only prolonged the recession.

LMAO......uh ok.....

 

[JakeStarkey]

Check the dates of legislation, spending, and recovery, then come back and admit you are a toid.