The Success of Reaganomics

[Jroc]

In August 1981, President Reagan signed the Economic Recovery Tax Act of 1981, which brought reductions in individual income tax rates, the expensing of depreciable property, and incentives for small businesses and incentives for savings. So began the Reagan Recovery. A few years later, the Tax Reform Act of 1986 brought the lowest individual and corporate income tax rates of any major industrialized country in the world. The numbers tell the story. Over the eight years of the Reagan Administration: 20 million new jobs were created Inflation dropped from 13.5* in 1980 to 4.1* by 1988 Unemployment fell from 7.6% to 5.5*

Net worth of families earning between $20,000 and $50,000 annually grew by 27% Real gross national product rose 26% The prime interest rate was slashed by more than half, from an unprecedented 21.5* in January 1981 to 10* in August 1988 Given actual rates of inflation, through 1987, the Reagan tax cuts saved the median-income two-earner American family of four close to $9,000 in taxes from what it would have owed in 1980.Tax cuts were only one "leg of the stool." The second, jobs, was equally strong. Not only were there millions of new jobs, but also the benefits of job creation were not limited to one segment of society. Employment of African-Americans rose by more than 25% between 1982 and 1988, and more than half of the new jobs created went to women. Taming the lion called government spending was another key component of the plan - the "third leg of the stool." Here, too, President Reagan did what he said he would do. During his Administration, growth in government spending plummeted from 10% in 1982, to just over 1% in 1987. With inflation factored in, Federal spending actually went down in 1987 - the first time that had happened in well over a decade.

REAGAN FOUNDATION 105R

 

[Jroc]

Reagan raised taxes? the haters always bring this up

Betryal on tax increases


Sometimes Reagan went along with a pragamatist like chief of staff James Baker, who persuaded the president to accept the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA), which turned out to be the great tax increase of 1982 -- $98 billion over the next three years. That was too much for eighty-nine House Republicans (including second-term Congressman Newt Gingrich of Georgia) or for prominent conservative organizations from the American Conservative Union like the Conservative Caucus and the U.S. Chamber of Commerce, which all opposed the measure.
Baker assured his boss that Congress would approve three dollars in spending cuts for every dollar of tax increase. To Reagan, TEFRA looked like a pretty good "70 percent" deal. But Congress wound up cutting less than twenty-seven cents for every new tax dollar. What had seemed to be an acceptable 70-30 compromise turned out to be a 30-70 surrender. Ed Meese described TEFRA as "the greatest domestic error of the Reagan administration," although it did leave untouched the individual tax rate reductions approved the previous year. (TEFRA was built on a series of business and excise taxes plus the removal of business tax deductions.)
The basic problem was that Reagan believed, as Lyn Nofziger put it, that members of Congress "wouldn't lie to him when he should have known better." As a result of TEFRA, Reagan learned to "trust but verify," whether he was dealing with a Speaker of the House or a president of the Soviet Union.


http://www.reagansheritage.org/html/reagan_edwards12.

 

[Jroc]

Defict


Well, let’s take a look at the Reagan legacy on federal spending and deficits. In 1980, the last year of Jimmy Carter’s presidency, government outlays were running at 21.7% of GDP and the budget deficit was 2.7% of GDP. (The economy was also a basket case, which is when you would expect budget deficits to be at their worse.) In 1988, Reagan’s last year in office, outlays as a percent of GDP were running at 21.3% with a deficit of 3.1% of GDP. The budget deficit over Reagan’s eight years averaged 4.2% and ran as high as 6.0% in 1983.

 

[uscitizen]

Regan may have reduced the tax rates, he however did away with lots of deductions on personal income tax so it was a net tax increase.
I was there I know.

 

[uscitizen]

Defict


Well, let’s take a look at the Reagan legacy on federal spending and deficits. In 1980, the last year of Jimmy Carter’s presidency, government outlays were running at 21.7% of GDP and the budget deficit was 2.7% of GDP. (The economy was also a basket case, which is when you would expect budget deficits to be at their worse.) In 1988, Reagan’s last year in office, outlays as a percent of GDP were running at 21.3% with a deficit of 3.1% of GDP. The budget deficit over Reagan’s eight years averaged 4.2% and ran as high as 6.0% in 1983.

Lets talk absolutes ie dollars not %gdp crap.

 

[Jroc]

Regan may have reduced the tax rates, he however did away with lots of deductions on personal income tax so it was a net tax increase.
I was there I know.

you're clueless check again

 

[Jroc]

Defict


Well, let’s take a look at the Reagan legacy on federal spending and deficits. In 1980, the last year of Jimmy Carter’s presidency, government outlays were running at 21.7% of GDP and the budget deficit was 2.7% of GDP. (The economy was also a basket case, which is when you would expect budget deficits to be at their worse.) In 1988, Reagan’s last year in office, outlays as a percent of GDP were running at 21.3% with a deficit of 3.1% of GDP. The budget deficit over Reagan’s eight years averaged 4.2% and ran as high as 6.0% in 1983.

Lets talk absolutes ie dollars not %gdp crap.

Percentage of GDP is what counts, you're not too bright when it comes to ecomomics are you? Gross National product is higher, there is more wealth that has been created. Get it?

 

[Jroc]

Contrary to the liberal talking points...

http://www.house.gov/jec/fiscal/tx-grwth/reagtxct/reagtxct.htm

 

[JFK_USA]

Or lets go with Growth of National debt. Reagan grew the national debt by 189%!!!! So much for a fiscally conservative president. But I guess pin the debt tail on the donkeys.

 

[shintao]

Lets give Reagan a hand, and cut the government by 98%. Just keep the IRS & 40% tax rate & send congress home until we have paid off our mounting debts. I am not afraid to take responsibility for myself & family for four years without government. Bring it on.

 

[Jroc]

Or lets go with Growth of National debt. Reagan grew the national debt by 189%!!!! So much for a fiscally conservative president. But I guess pin the debt tail on the donkeys.

Reagan grew the national debt by 1.5 trillion over the eight years he was in office but his policies help to create over 17 trillion dollars in wealth during his term and many more trillions after that get a glue. Check the numbers

 

[NYcarbineer]

Reagan presided over a 16th month recession starting in July 1981, which means almost all of it occurred AFTER his tax cuts.

Reagan couldn't balance a budget even when the business cycle gave him a strong expansion to work with, unlike Clinton, who got the same sort of expansion in his presidency AND balanced the budget.

 

[gekaap]

Over the eight years of the Reagan Administration: 20 million new jobs were created

Untrue. During his first term, 5.3 million jobs were created. During his second term, 10.8 million were created. Grand total of 16.1 million jobs. It's worth noting that this was paralleled the rate of population growth Impressive number, topped by only one other President in history. But not what you've claimed. The only President to "create" at least 20 million jobs over two terms was Clinton. I have not yet found info as to how this compares to the population growth during the same period.

Inflation dropped from 13.5* in 1980 to 4.1* by 1988 Unemployment fell from 7.6% to 5.5*

It's also worth noting that inflation was diminished via very high interest rates by the Fed. This caused unemployment to increase to nearly 10% and a recession.

Net worth of families earning between $20,000 and $50,000 annually grew by 27%

This stat means very little when we remember that those increases in the average were thanks only to increased wealth at the top levels. During Reagan's watch, the income gap increased as the rich got richer, the poor got poorer, and the people in the middle were pretty much the same.

Real gross national product rose 26% The prime interest rate was slashed by more than half, from an unprecedented 21.5* in January 1981 to 10* in August 1988 Given actual rates of inflation, through 1987, the Reagan tax cuts saved the median-income two-earner American family of four close to $9,000 in taxes from what it would have owed in 1980.

As I just mentioned, the averages end up meaning very little since the action was really at the extreme ends of the spectrum.

Tax cuts were only one "leg of the stool." The second, jobs, was equally strong. Not only were there millions of new jobs, but also the benefits of job creation were not limited to one segment of society. Employment of African-Americans rose by more than 25% between 1982 and 1988, and more than half of the new jobs created went to women.

Attributing this to Reagan is short sighted at the very least. Society has been in a continuing shift regarding minorities and their situation. One could note that under Obama, more gay couples are getting married than ever. But the truth in both cases is that the maturing of social attitudes has a very large part of these phenomena, and there seems to be no evidence that either President's policies have anything to do with it.

Taming the lion called government spending was another key component of the plan - the "third leg of the stool." Here, too, President Reagan did what he said he would do. During his Administration, growth in government spending plummeted from 10% in 1982, to just over 1% in 1987.

Really? The cuts in various expenditures were more than made up for in defense spending, and magic astericks that did no materialize.

With inflation factored in, Federal spending actually went down in 1987 - the first time that had happened in well over a decade.

Here is a table of government expenditures for right before, during, and after Reagan's time in office (expressed in millions of dollars)(pg. 26):

1979: $504,028
1980: $590,941
1981: $678,241
1982: $745,743
1983: $808,364
1984: $851,853
1985: $946,396
1986: $990,441
1987: $1,004,083
1988: $1,064,481
1989: $1,143,813
1990: $1,253,116

Reagan was one of the most prolific spenders in the nation's history.

REAGAN FOUNDATION 105R

Goodness, what an entirely unbiased source.

Reagan is responsible for some of the largest deficits we've ever seen. More importantly, Reagan ushered in the current running era of extreme deficits and public debt in which we continue to be trapped.

Chart 1
Chart 2

Starting shortly after Truman took office, the national debt, as a percentage of GDP had been on a downward trend. When Reagan took office that sharply turned upward. Each year of his time in office, Reagan increased the debt heavily with some of the largest yearly increases ever.

One point where Reagan might be viewed as strong economically is his job creation numbers. However, this needs to be viewed in the proper context. Reagan's immigration amnesty granted legal status to 3 million undocumented workers. This, in turn, put onto paper 3 million jobs that were previously under the table, and as such unreported. Factoring this into the equation, Reagan's actual job creation numbers are 13 million over his two terms. Also relevant is that his job creation mirrored population growth. Additionally, Jimmy Carter created slightly more than 10 million jobs in the four years before Reagan was in office, and Bill Clinton created slightly more than 11 million jobs in each term of his Presidency. Therefore, when viewing the situation from a broader perspective, Reagan's job numbers become, at best, what should be expected considering normal growth of the populace.

Thus, as a whole, Reagan performed very poorly in terms of economics. Ushering in an era of gross fiscal irresponsibility, and his "best" accomplishments either meeting with equally bad offsetting consequences or being seen as par from a broader historical perspective, there is little for which Reagan can be praised as an economic success.

 

[Jroc]

Untrue. During his first term, 5.3 million jobs were created. During his second term, 10.8 million were created. Grand total of 16.1 million jobs. It's worth noting that this was paralleled the rate of population growth Impressive number, topped by only one other President in history. But not what you've claimed. The only President to "create" at least 20 million jobs over two terms was Clinton. I have not yet found info as to how this compares to the population growth during the same period.

There are two defensible methods of measuring the performance of the economy on Reagan's watch. One method is to examine the economic record from the month Reagan formally took office, January 1981, through the month he left the White House, January 1989.
An alternative approach is to allow a one-year lag for the policy changes to be enacted and take effect on the economy. Reagan's tax cuts were not even passed by Congress until midsummer of 1981 and did not begin to take effect until October 1, 1981. His first budget proposal was for fiscal year 1982. Hence, if we define the beginning of the Reagan years as the first full year when the policies were in effect, the eight years in which Reagan's policies were in effect were 1982-89. This latter approach seems to provide a more accurate gauge of the economy's reaction to the change in policies Reagan enacted in 1981, and for this reason we adopt this as the standard for analysis in this study--that is, we measure the economic effects of Reagan policies beginning with January 1982 and using 1981 as the base year of comparison. (This still picks up the deep recession of the early 1980s.)

It's also worth noting that inflation was diminished via very high interest rates by the Fed. This caused unemployment to increase to nearly 10% and a recession.

Temporary spike in unemployment to 9.5 % he had to get inflation under control first

Net worth of families earning between $20,000 and $50,000 annually grew by 27%
This stat means very little when we remember that those increases in the average were thanks only to increased wealth at the top levels. During Reagan's watch, the income gap increased as the rich got richer, the poor got poorer, and the people in the middle were pretty much the same.

Bull...

The gains in incomes of all income groups is all the more impressive when we examine data on income mobility. Tens of millions of Americans moved up the income scale in the 1980s--an economic fact that is obscured when only the static income quintile data from the start of the decade to the end are examined. Figure 12 shows that 86 percent of households that were in the poorest income quintile in 1980 had moved up the economic ladder to a higher income quintile by 1990. Incredibly, a poor household in 1980 was more likely to have moved all the way up to the richest income quintile by 1990 (15 percent) than to still be in the poorest quintile (14 percent).

https://www.cato.org/pubs/pas/pa-261.html

Tax cuts were only one "leg of the stool." The second, jobs, was equally strong. Not only were there millions of new jobs, but also the benefits of job creation were not limited to one segment of society. Employment of African-Americans rose by more than 25% between 1982 and 1988, and more than half of the new jobs created went to women.
Attributing this to Reagan is short sighted at the very least. Society has been in a continuing shift regarding minorities and their situation. One could note that under Obama, more gay couples are getting married than ever. But the truth in both cases is that the maturing of social attitudes has a very large part of these phenomena, and there seems to be no evidence that either President's policies have anything to do with it

.


Drival….Facts are facts

Taming the lion called government spending was another key component of the plan - the "third leg of the stool." Here, too, President Reagan did what he said he would do. During his Administration, growth in government spending plummeted from 10% in 1982, to just over 1% in 1987.
Really? The cuts in various expenditures were more than made up for in defense spending, and magic astericks that did no materialize

Really? We’ll put aside the fact the we spent the Soviet Union into bankrutcy. Growth in spending still went down

Reagan was one of the most prolific spenders in the nation's history

.


Let’s not forget Reagan had a democrat congress to work with, as the previous post pointed out they screwed him on spending cuts

Baker assured his boss that Congress would approve three dollars in spending cuts for every dollar of tax increase. To Reagan, TEFRA looked like a pretty good "70 percent" deal. But Congress wound up cutting less than twenty-seven cents for every new tax dollar. What had seemed to be an acceptable 70-30 compromise turned out to be a 30-70 surrender. Ed Meese described TEFRA as "the greatest domestic error of the Reagan administration," although it did leave untouched the individual tax rate reductions approved the previous year. (TEFRA was built on a series of business and excise taxes plus the removal of business tax deductions.)
The basic problem was that Reagan believed, as Lyn Nofziger put it, that members of Congress "wouldn't lie to him when he should have known better." As a result of TEFRA, Reagan learned to "trust but verify," whether he was dealing with a Speaker of the House or a president of the Soviet Union.

Starting shortly after Truman took office, the national debt, as a percentage of GDP had been on a downward trend. When Reagan took office that sharply turned upward. Each year of his time in office, Reagan increased the debt heavily with some of the largest yearly increases ever.

Like I said he got screwed on speanding cuts

One point where Reagan might be viewed as strong economically is his job creation numbers. However, this needs to be viewed in the proper context. Reagan's immigration amnesty granted legal status to 3 million undocumented workers. This, in turn, put onto paper 3 million jobs that were previously under the table, and as such unreported. Factoring this into the equation, Reagan's actual job creation numbers are 13 million over his two terms. Also relevant is that his job creation mirrored population growth. Additionally, Jimmy Carter created slightly more than 10 million jobs in the four years before Reagan was in office, and Bill Clinton created slightly more than 11 million jobs in each term of his Presidency. Therefore, when viewing the situation from a broader perspective, Reagan's job numbers become, at best, what should be expected considering normal growth of the populace.

Yeah ..ok more speculation, and bull you assume all 3 miliion had jobs? all women and children. and what does growth in population have to do with job growth? You can have one without the other, the two aren’t related

 

[georgephillip]

Reagan the corporate shill

"First, under Reagan the average hourly wage, adjusted for inflation ($1982) declined from $7.93 to $7.79 from 1980 to 1988.

"Real weekly earnings fell from $281.21 to $270.32. Moreover, this US Dept. of Labor data is extremely conservative with regard to the real wage decline for working and middle class Americans, since it defines and includes as ‘wage’ the salary equivalent of managers and even CEOs which bumps up the ‘average’.

"Those same CEOs, investors, and other recipients of capital incomes (dividends, interest, rent, capital gains, etc.) in contrast did far better than the average working class wage earner.

"According to Internal Revenue Service data, the wealthiest 10% households in the U.S. increased their share of total US household income from 32% to 39% over Reagan’s eight years—two-thirds of which was accrued by the wealthiest 1% of the top 10% households.

"The wealthiest 0.1% households did even better.

"After remaining between 1.7% to 2.0% share of income for more than twenty years, from 1960 to 1980, their income share tripled under Reagan from less than 2% in 1980 to more than 6% by 1988. In contrast to these very wealthiest, for the poorest working class households there were no adjustments to the minimum wage over the Reagan period, as Reagan made clear he would veto any such adjustment.

"Consequently, the minimum wage declined from $6.55 an hour to $4.80 an hour in real terms between 1980-89—or 27%.

"Not surprisingly, the poverty rate rose from 8.9% to 10.9% between 1980-86 largely as a result, and two paycheck families rose from 42% to 49% of all households between 1980-87 to accommodate stagnant working class earnings growth over the period.

"For corporate profits, after a consistent 6.6% annual growth rate throughout the 1970s decade (only slightly lower than the 7.5% rate during the 1950s boom years) during the Reagan years profits grew annually in the 9%-10% range."

ZCommunications

 

[editec]

Real purchasing power for the working classes started decline long before Reagan took office, folks.

If you want to fault any POTUS fault every POTUS and every Congress for allowing that to happen.

Yes, they could easily have done things to change this dynamic.

But as they work for the upper eschelons of society, who enjoyed enormous growqth of income during the same time, they didn't prevent this disaster they CAUSED IT.

Put away your partisan blinders, folks.

 

[georgephillip]

It is a class war

"For example, the average federal tax rate (which includes individual, corporate, payroll and estate taxes) remained virtually unchanged for the bottom 95% of households over the entire decade of the 1980s.

"Only the wealthiest 5% witnessed their total federal tax rates reduced.

"The very wealthiest households’ federal tax rate declined from 59.3% to 35.4%.

"The total federal tax rate for U.S. population as a whole fell by less than 0.8% over the decade.

"In other words, the top 1% households effectively received virtually all the total federal tax rate deduction."

ZCommunications

 

[Dr.Drock]

Reaganomics=Obamanomics

Spend spend spend, debt debt debt, spend spend spend, debt debt debt.

Soaring gas and sales taxes, soaring healthcare and cigarette taxes. (reagan, obama)

People need to realize the president has a lot less to do with the economy than the Fed does, the Fed deserves the credit and blame and more often than not the blame.

 

[Mr. Shaman]

The Success of Reaganomics

Yeah....it was so successful, Lil' Dumbya decided to turn-it-loose, again......

The Reign of George II: Voodoo Reaganomics, the Sequel

*

.....And, what BETTER, an endorsement, than from the dude who dreamed-it-all-UP??!!!!

​

"Generally, he did not lose his temper, but on a pleasant afternoon in early September, Stockman returned from a meeting at the White House in a terrible black mood. In his ornately appointed office at OMB, he slammed his papers down on the desk and waved away associates. At the Oval Office that afternoon, Stockman had lost the great argument he had been carefully preparing since February: there would be no major retrenchment in the defense budget. Over the summer, Stockman had made converts, one by one, in the Cabinet and among the President's senior advisers. But he could not convince the only hawk who mattered--Ronald Reagan. When the President announced that he would reduce the Pentagon budget by only $13 billion over the next three years, it seemed a pitiful sum compared with what he proposed for domestic programs, hardly a scratch on the military complex, which was growing toward $350 billion a year."

The Education of David Stockman​

ReRon Reagan was Daddy Bush's dancing-monkey (to keep the crowd distracted)....much like Lil' Dumbya was, for The DICK; Cheney.​

 

[Mr. Shaman]

Reagan raised taxes? the haters always bring this up

The haters?????



You "conservatives" really-do need to look into the possibility there might be medication (available), to deal with your martyr-complex.

As for ReRon.....it's MUCH-too-late to rewrite his Legacy.​

"Today, what does it mean to be a Republican? It means you can cut taxes indiscriminately and needn't worry about the debt you're piling up. It certainly doesn't mean that you want to shrink the federal government. Indeed, government spending under George W. Bush has increased faster than it did under Bill Clinton. Before Reagan, pandering was principally a Democratic vice. Today, it's principally a Republican vice. Ronald Reagan performed that transformation, and it remains his most enduring legacy."

Ronald Reagan, Party Animal
The man who taught Republicans to be irresponsible.​