Reaganomics vs Obamanomics

[The Rabbi]

Reagan was a Keynesian, he spent like crazy till he started to raise taxes like crazy. America became a debtor nation under Reagan because his spending was on useless defense systems that didn't work. ]

So how come it failed when Obama tried the same thing?

 

[JMadison]

One succeeded, the other failed. From this AM's WSJ. More at the source.

If you really want to light the fuse of a liberal Democrat, compare Barack Obama's economic performance after 30 months in office with that of Ronald Reagan. It's not at all flattering for Mr. Obama.

The two presidents have a lot in common. Both inherited an American economy in collapse. And both applied daring, expensive remedies. Mr. Reagan passed the biggest tax cut ever, combined with an agenda of deregulation, monetary restraint and spending controls. Mr. Obama, of course, has given us a $1 trillion spending stimulus.

By the end of the summer of Reagan's third year in office, the economy was soaring. The GDP growth rate was 5% and racing toward 7%, even 8% growth. In 1983 and '84 output was growing so fast the biggest worry was that the economy would "overheat." In the summer of 2011 we have an economy limping along at barely 1% growth and by some indications headed toward a "double-dip" recession. By the end of Reagan's first term, it was Morning in America. Today there is gloomy talk of America in its twilight.

My purpose here is not more Reagan idolatry, but to point out an incontrovertible truth: One program for recovery worked, and the other hasn't.

The Reagan philosophy was to incentivize production—i.e., the "supply side" of the economy—by lowering restraints on business expansion and investment. This was done by slashing marginal income tax rates, eliminating regulatory high hurdles, and reining in inflation with a tighter monetary policy.



The Keynesians in the early 1980s assured us that the Reagan expansion would not and could not happen. Rapid growth with new jobs and falling rates of inflation (to 4% in 1983 from 13% in 1980) is an impossibility in Keynesian textbooks. If you increase demand, prices go up. If you increase supply—as Reagan did—prices go down.

The Godfather of the neo-Keynesians, Paul Samuelson, was the lead critic of the supposed follies of Reaganomics. He wrote in a 1980 Newsweek column that to slay the inflation monster would take "five to ten years of austerity," with unemployment of 8% or 9% and real output of "barely 1 or 2 percent." Reaganomics was routinely ridiculed in the media, especially in the 1982 recession. That was the year MIT economist Lester Thurow famously said, "The engines of economic growth have shut down here and across the globe, and they are likely to stay that way for years to come."

The economy would soon take flight for more than 80 consecutive months. Then the Reagan critics declared what they once thought couldn't work was actually a textbook Keynesian expansion fueled by budget deficits of $200 billion a year, or about 4%-5% of GDP

Stephen Moore: Obamanonics vs. Reaganomics - WSJ.com

What Obamanomics? I thought it was still Bush's fault.

 

[Trajan]

And I think it is worth mentioning that in addition to my previous post Reagan had a stronger manufacturing base and a stronger consumer base.

and Eisenhower had better of both and so what? we pay for results, get over it.

 

[Full-Auto]

One succeeded, the other failed. From this AM's WSJ. More at the source.

If you really want to light the fuse of a liberal Democrat, compare Barack Obama's economic performance after 30 months in office with that of Ronald Reagan. It's not at all flattering for Mr. Obama.

The two presidents have a lot in common. Both inherited an American economy in collapse. And both applied daring, expensive remedies. Mr. Reagan passed the biggest tax cut ever, combined with an agenda of deregulation, monetary restraint and spending controls. Mr. Obama, of course, has given us a $1 trillion spending stimulus.

By the end of the summer of Reagan's third year in office, the economy was soaring. The GDP growth rate was 5% and racing toward 7%, even 8% growth. In 1983 and '84 output was growing so fast the biggest worry was that the economy would "overheat." In the summer of 2011 we have an economy limping along at barely 1% growth and by some indications headed toward a "double-dip" recession. By the end of Reagan's first term, it was Morning in America. Today there is gloomy talk of America in its twilight.

My purpose here is not more Reagan idolatry, but to point out an incontrovertible truth: One program for recovery worked, and the other hasn't.

The Reagan philosophy was to incentivize production—i.e., the "supply side" of the economy—by lowering restraints on business expansion and investment. This was done by slashing marginal income tax rates, eliminating regulatory high hurdles, and reining in inflation with a tighter monetary policy.



The Keynesians in the early 1980s assured us that the Reagan expansion would not and could not happen. Rapid growth with new jobs and falling rates of inflation (to 4% in 1983 from 13% in 1980) is an impossibility in Keynesian textbooks. If you increase demand, prices go up. If you increase supply—as Reagan did—prices go down.

The Godfather of the neo-Keynesians, Paul Samuelson, was the lead critic of the supposed follies of Reaganomics. He wrote in a 1980 Newsweek column that to slay the inflation monster would take "five to ten years of austerity," with unemployment of 8% or 9% and real output of "barely 1 or 2 percent." Reaganomics was routinely ridiculed in the media, especially in the 1982 recession. That was the year MIT economist Lester Thurow famously said, "The engines of economic growth have shut down here and across the globe, and they are likely to stay that way for years to come."

The economy would soon take for more than 80 consecutive months. Then the Reagan critics declared what they once thought couldn't work was actually a textbook Keynesian expansion fueled by budget deficits of $200 billion a year, or about 4%-5% of GDP

Stephen Moore: Obamanonics vs. Reaganomics - WSJ.com

What Obamanomics? I thought it was still Bush's fault.

It is ............................................

 

[Trajan]

The FED started deampening down STAGFLATION long before Reagan took office, folks.

Remember what the prime rate was during Carters last years in office?

And by slowing down the economy, (read by increasing unemployment) the FED crushed inflation.

And THAT changing economy was what Reagan was working with.

Some of you might remember that Reagans first two years were sort of rocky, right?

But as the economy changed, as stagflation went away, the economy (thanks in part to Reagan's policies, but mostly tahnks to the pain and suffering that happened before he gtook office!) went through a period of recovery.

But comparing what Reagan face to what Obama faces is just foolish.

EAch POTUS faces thew economy he has, not the economy that some prevsious POTUS had.

I agree. The FED can do what the FED can do but it is NOT the sole arbitor of how the economy will act.



They certainly worked well for some of the population, on that we also agree.





More or less true.




Obama does not dictate the interests rates to the FED, amigo. No POTUS does that. Carter didn't, Reagan didn't, Bush II didn't and Obama does not.



MOre or less true. Of course we cannot know what might have happened if things had been done differently. That is the nature of social science problems, isn't it?

Each event is an entirely unique event in history.

The Fed's policy is to increase inflation. THat in itself tells you desperate everyone is.

Oh we've GOT inflation, alright.

Only its not inflating salaries, it is merely inflating the cost of consumables.

I'd say that the cost of living for the average American family has risen about 10% in the last couple years.

Meanwhile the value of labor continues to decline.

FWIW, I doubt any POTUS can do much about that, right now.

I pretty much agree with your responses however, its not a matter of CAN do right now, I think, its a matter of WILL do.

right now even if he came out with a platform he will fight tooth and nail for ala, cuts to all major spends not just Def. but medicare, block grants of medicaid and a big time restructure of the tax code as in growing the pie, ( erskine bowles boles hello) loophole closing, eliminating deductions its to late, he has a year and it won't help him, it would take 3-4 months to hammer that out and the time left probably would not see big enough growth to save him by nov. 12. AND in any event, and this is the key, we all know this is not the way he rolls, we both know this.

IF he had taken this path back in 2009, I sincerely believe we'd be in the midst of another Morning in America, but.....he took Keynes, fed him steroids and away we went ( aside form enacting another huge addition to the entitlement responsibility for mandatory spending ala Obamacare) .

I have always agreed that some facets of Keynes works , there is GOOD deficit spending, but as in all things its a matter of degree, Reagan's own party ( with slippery voice vote bi- partisan sppt) enacted Gramm-Rudman-Hollings to attempt to keep a lid on the budget in 85, it is what it is ( the cut mechanism was found unconstitutional though) .

 

[NYcarbineer]

American households currently have on average twice the amount of debt (vs. their incomes) that they did during the Reagan years.

In a consumer driven economy that is a disparity that makes meaningful comparisons of Reagan and Obama impossible when it comes to jobs.

 

[The Rabbi]

American households currently have on average twice the amount of debt (vs. their incomes) that they did during the Reagan years.

In a consumer driven economy that is a disparity that makes meaningful comparisons of Reagan and Obama impossible when it comes to jobs.

How does household debt mean that comparisons to employment are impossible??

 

[M.D. Rawlings]

Your numbers say excactly what I say unemployment went down from 7.8 in july 1980 to 7.2 in December 1980. Remember Reagan didn't take office until Jan. 1981

What an economic illiterate. Read up on the 1981-1982 recession (and what it did to tame inflation), and then get back to us.

Economic illiterate?! And we were doing so nicely without the nasty up 'til now.

Hogwash!

You're foolishly arguing that the current economic crisis is worse than the one confronted by Reagan, without any consideration given to the simultaneous problems that prevailed in the Seventies and early Eighties of (1) a shrinking economy and (2) extravagantly high interest rates. Inflation? The only thing I alluded to in that regard goes to the economic hangover of the Seventies relative to economic recovery in the early Eighties, the aftermath of stagflation.

In any event, even if I allowed that an unsustainable national debt hangs over the troubled economy of today, the fundaments of the private sector are vastly more amendable to correction, particularly given the large investment reserve currently held by medium to large businesses in a low-interest-rate environment.

Take your economic illiteracy and shove it! The Idiot and Chief Obama squandered billions while we conservatives knew all along that his Keynesian "stimuli" would not work, would in fact make things worse. Trillions more of debt. For what? And on top of that, he saddles this nation with a healthcare "reform" that will add trillions more in debt and billions more in burdensome regulation and taxation on the private sector if not stopped. But wait! There's more! This administration has regulated new development and production of domestic energy virtually out of existence, unnecessarily driving the costs of utilities and food through the roof. And it wants to tax the large cash reserve, dormant investment capital, held by medium to large businesses out of existence too when corporate tax rates are already too high as it is.

And why is it dormant?

Get back to us on that genius.

As for the year Reagan took office. Yes, of course. I know that. I see that I inserted a note in the wrong place, confusing things. In the original draft I had it in the right place, but added some stats and forgot to move it. But you're saying that his policies drove unemployment up. How could that have been? Though fluctuating somewhat, the overall unemployment rate was trending up before and after he took office, before his policies could have had any effect whatsoever in that regard. That's the point! You're point is silly, irrelevant, purely incidental and dishonest. In other words, it's moot.

With the correction, observe:

U.S. Department of Labor: Bureau of Labor Statisticshttp://research.stlouisfed.org/fred2/data/UNRATE.txt​

1980-01 to 1980-03: 6.3%

1980-04: 6.9%

1980-05: 7.5%

1980-06: 7.6%

1980-07: 7.8%

1980-08: 7.7%

1980-09 to 1980-11: 7.5%

1980-12: 7.2%

1981-01: 7.5%

1981-02 to 1981-03: 7.4%

1981-04: 7.2%

1981-05 to 1981-6: 7.5%

1981-07: 7.2%

Obviously, Reagan's policies had nothing to do with that trend, and then it went down a bit and up a bit in a fluctuating fashion, again, clearly, before Reagan's policies could have possibly had any real effect one way or the other. Additional note: The overall trend was up.

1981-08: 7.4%

1981-09: 7.6%

1981-10: 7.9%

And so on from there. . . .

1982-11 to 1982-12: 10.8%

1983-01 to 1983-02: 10.4%

1983-03: 10.3%

1983-09: 9.2%

1984-09: 7.3%

And so on. . . .

1988-12: 5.3%

The pattern toward the end of Carter's term:

1978-10: 5.8%

1978-11: 5.9%

1978-12: 6.0%

1979-01 to 1979-02: 5.9%

1979-03 to 1979-04: 5.8%

1979-05: 5.6%

1979-06 to 1979-07: 5.7

1979-08 to 1979-12: 6.0%

Rising again . . . but what was really killing us during Carter's term was an entrenched recession with staggeringly high interest rates, which Reagan's policies had clearly corrected by the end of the first quarter of 1984, with unemployment dropping back down rapidly as a result of a resurging economy. Hence, his landslide victory in November of that same year. Bottom line: Reagan inherited a multiple, negative-trend, economic disaster that had yet to do its worst in terms of unemployment. With the underlying causes of economic ill-health corrected, unemployment dropped.[/QUOTE]

 

[Truthseeker420]

That's the manufacturing base that was being decimated by Japanese competition, right?
Were you even alive then?

But it doesn't matter. Reagan's polciies worked, Obama's have failed. That is simply the record here.

Japanese cars were becoming more popular due to the oil crisis. Reagan raised taxes, expanded the government and raised the National Debt by a record amount. Reagan did released some trade restrictions that improved the economy but IMO Trickle Down economics is a total failure.

And I was elementary school during Carter. I guess I am Gen X.

You haven't progressed much since then.
Detroit tried to roll out cars to compete with the Toyota and Honda. We got the Pinto and AMC Pacer.
The steel industry was in deep decline, as foreign companies could produce steel, ship it, and sell it cheaper than American made. THe US still made televisions, but that went away too. Same with radios and other electronic stuff.
The record of Reagan's economic policy is clear and acknowledged by anyone who isnt a partisan hack with an agenda to grind.

You ask me a question just to insult me?

 

[Truthseeker420]

American households currently have on average twice the amount of debt (vs. their incomes) that they did during the Reagan years.

In a consumer driven economy that is a disparity that makes meaningful comparisons of Reagan and Obama impossible when it comes to jobs.

Also Bush and Republicans made it impossible to get out of debt from predatory lending and illegal charges. with the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. Should be called the " Pledator Bank Protection Act before the economy takes a dive"

 

[Big Fitz]

American households currently have on average twice the amount of debt (vs. their incomes) that they did during the Reagan years.

In a consumer driven economy that is a disparity that makes meaningful comparisons of Reagan and Obama impossible when it comes to jobs.

Also Bush and Republicans made it impossible to get out of debt from predatory lending and illegal charges. with the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. Should be called the " Pledator Bank Protection Act before the economy takes a dive"

AAAAAAAAAAAAAHAHAHAHAHAHHAHAHAHAAAAAAA!!!!

You're trying out Predatory Lending again???/

How about the Reno Justice Dept persecuting banks for 'redlining' forcing them to make bad loans which is the essence of the whole crisis.

M

 

[editec]

I agree. The FED can do what the FED can do but it is NOT the sole arbitor of how the economy will act.



They certainly worked well for some of the population, on that we also agree.





More or less true.




Obama does not dictate the interests rates to the FED, amigo. No POTUS does that. Carter didn't, Reagan didn't, Bush II didn't and Obama does not.



MOre or less true. Of course we cannot know what might have happened if things had been done differently. That is the nature of social science problems, isn't it?

Each event is an entirely unique event in history.






Oh we've GOT inflation, alright.

Only its not inflating salaries, it is merely inflating the cost of consumables.

I'd say that the cost of living for the average American family has risen about 10% in the last couple years.

Meanwhile the value of labor continues to decline.

FWIW, I doubt any POTUS can do much about that, right now.

I pretty much agree with your responses however, its not a matter of CAN do right now, I think, its a matter of WILL do.

right now even if he came out with a platform he will fight tooth and nail for ala, cuts to all major spends not just Def. but medicare, block grants of medicaid and a big time restructure of the tax code as in growing the pie, ( erskine bowles boles hello) loophole closing, eliminating deductions its to late, he has a year and it won't help him, it would take 3-4 months to hammer that out and the time left probably would not see big enough growth to save him by nov. 12. AND in any event, and this is the key, we all know this is not the way he rolls, we both know this.

YOu really think that any of those policies will revitalize this economy? If you do then in what timeframe would you expect these changes to take effect?

IF he had taken this path back in 2009, I sincerely believe we'd be in the midst of another Morning in America, but.....he took Keynes, fed him steroids and away we went ( aside form enacting another huge addition to the entitlement responsibility for mandatory spending ala Obamacare) .

A Keynesian response go, Obamas wasn't on steriods.

To see a real STEROID driven keynesian economy, one must look at how the USA responded when World War II happened.

Now THAT was a Keynesian response that was writ LARGE in the economy.

Of course a stimulus package of that magnitude probably isn't even remotely possble anymore.

Not with the debt overhang this nation has thanks to 40 years of rather STUPID spending and taxing policies.

I think the right wing antidemocratic forces have basically WON the game, Tragan.

I have always agreed that some facets of Keynes works , there is GOOD deficit spending, but as in all things its a matter of degree, Reagan's own party ( with slippery voice vote bi- partisan sppt) enacted Gramm-Rudman-Hollings to attempt to keep a lid on the budget in 85, it is what it is ( the cut mechanism was found unconstitutional though) .

In the prper cicumstance, Keynesian policies make sense.

In other cicumstances SUPPLY SIDE policies make sense.

In these circumstances I do not think either response will really work.

We have got to decide as a nation if we want this nation to be a going concern.

If we do them we have got to abandon our current affection for international economics and start to focus on crafting economic, trade and tax policies that will revitalize our national economy ICLUDING the family economies of the middle class.

Frankly I see no political mechanism (or read politcal will of that works for you) that can lead us to make the very difference choices we'd need to make.

American is going DOWN, because ATLAS is Shrugging off the former (Americans first!) social contract in favor of a social contract with the REST OF THE WORLD.

 

[Truthseeker420]

American households currently have on average twice the amount of debt (vs. their incomes) that they did during the Reagan years.

In a consumer driven economy that is a disparity that makes meaningful comparisons of Reagan and Obama impossible when it comes to jobs.

Also Bush and Republicans made it impossible to get out of debt from predatory lending and illegal charges. with the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. Should be called the " Pledator Bank Protection Act before the economy takes a dive"

AAAAAAAAAAAAAHAHAHAHAHAHHAHAHAHAAAAAAA!!!!

You're trying out Predatory Lending again???/

How about the Reno Justice Dept persecuting banks for 'redlining' forcing them to make bad loans which is the essence of the whole crisis.

M

outlawing redling did not force banks to make bad loans. And the main reason for the crah was the inflating of housing prices by wall street using fraud.

Why Isn't Wall Street in Jail? | Rolling Stone Politics


Not a single executive who ran the companies that cooked up and cashed in on the phony financial boom — an industrywide scam that involved the mass sale of mismarked, fraudulent mortgage-backed securities — has ever been convicted. Their names by now are familiar to even the most casual Middle American news consumer: companies like AIG, Goldman Sachs, Lehman Brothers, JP Morgan Chase, Bank of America and Morgan Stanley. Most of these firms were directly involved in elaborate fraud and theft. Lehman Brothers hid billions in loans from its investors. Bank of America lied about billions in bonuses. Goldman Sachs failed to tell clients how it put together the born-to-lose toxic mortgage deals it was selling. What's more, many of these companies had corporate chieftains whose actions cost investors billions — from AIG derivatives chief Joe Cassano, who assured investors they would not lose even "one dollar" just months before his unit imploded, to the $263 million in compensation that former Lehman chief Dick "The Gorilla" Fuld conveniently failed to disclose. Yet not one of them has faced time behind bars.

 

[NYcarbineer]

American households currently have on average twice the amount of debt (vs. their incomes) that they did during the Reagan years.

In a consumer driven economy that is a disparity that makes meaningful comparisons of Reagan and Obama impossible when it comes to jobs.

How does household debt mean that comparisons to employment are impossible??

Because 70% of our economy is consumer driven. If consumers are already up their ears in debt, their willingness to spend more and go deeper in debt is obviously is relatively curtailed.

If demand for goods and services is curtailed, then the need for businesses to add employees is curtailed. Supply and demand.

Think of it in relation to the government. Can the government afford to go on a spending spree with the debt level where it is?

Can consumers?

This what it looks like:

 

[Big Fitz]

Also Bush and Republicans made it impossible to get out of debt from predatory lending and illegal charges. with the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. Should be called the " Pledator Bank Protection Act before the economy takes a dive"

AAAAAAAAAAAAAHAHAHAHAHAHHAHAHAHAAAAAAA!!!!

You're trying out Predatory Lending again???/

How about the Reno Justice Dept persecuting banks for 'redlining' forcing them to make bad loans which is the essence of the whole crisis.

M

outlawing redling did not force banks to make bad loans. And the main reason for the crah was the inflating of housing prices by wall street using fraud.

Why Isn't Wall Street in Jail? | Rolling Stone Politics


Not a single executive who ran the companies that cooked up and cashed in on the phony financial boom — an industrywide scam that involved the mass sale of mismarked, fraudulent mortgage-backed securities — has ever been convicted. Their names by now are familiar to even the most casual Middle American news consumer: companies like AIG, Goldman Sachs, Lehman Brothers, JP Morgan Chase, Bank of America and Morgan Stanley. Most of these firms were directly involved in elaborate fraud and theft. Lehman Brothers hid billions in loans from its investors. Bank of America lied about billions in bonuses. Goldman Sachs failed to tell clients how it put together the born-to-lose toxic mortgage deals it was selling. What's more, many of these companies had corporate chieftains whose actions cost investors billions — from AIG derivatives chief Joe Cassano, who assured investors they would not lose even "one dollar" just months before his unit imploded, to the $263 million in compensation that former Lehman chief Dick "The Gorilla" Fuld conveniently failed to disclose. Yet not one of them has faced time behind bars.

I call bullshit. You can't force someone to make loans to someone who can't afford it, and then expect the lending institution to remain financially stable. That's just plain fucking logic. It's wishful thinking to believe otherwise. I know you don't leave liberal fantasyland, but those theories don't work here in the real world were cause and effect don't give a shit about feelings and 'nice'.

 

[Oldstyle]

AAAAAAAAAAAAAHAHAHAHAHAHHAHAHAHAAAAAAA!!!!

You're trying out Predatory Lending again???/

How about the Reno Justice Dept persecuting banks for 'redlining' forcing them to make bad loans which is the essence of the whole crisis.

M

outlawing redling did not force banks to make bad loans. And the main reason for the crah was the inflating of housing prices by wall street using fraud.

Why Isn't Wall Street in Jail? | Rolling Stone Politics


Not a single executive who ran the companies that cooked up and cashed in on the phony financial boom — an industrywide scam that involved the mass sale of mismarked, fraudulent mortgage-backed securities — has ever been convicted. Their names by now are familiar to even the most casual Middle American news consumer: companies like AIG, Goldman Sachs, Lehman Brothers, JP Morgan Chase, Bank of America and Morgan Stanley. Most of these firms were directly involved in elaborate fraud and theft. Lehman Brothers hid billions in loans from its investors. Bank of America lied about billions in bonuses. Goldman Sachs failed to tell clients how it put together the born-to-lose toxic mortgage deals it was selling. What's more, many of these companies had corporate chieftains whose actions cost investors billions — from AIG derivatives chief Joe Cassano, who assured investors they would not lose even "one dollar" just months before his unit imploded, to the $263 million in compensation that former Lehman chief Dick "The Gorilla" Fuld conveniently failed to disclose. Yet not one of them has faced time behind bars.

I call bullshit. You can't force someone to make loans to someone who can't afford it, and then expect the lending institution to remain financially stable. That's just plain fucking logic. It's wishful thinking to believe otherwise. I know you don't leave liberal fantasyland, but those theories don't work here in the real world were cause and effect don't give a shit about feelings and 'nice'.

The major reason why Canada hasn't experienced the painful crash of their real estate as we did is that in Canada banks were still getting a substantial down payment before approving home loans. One could make the argument that this whole crash can be traced to pressure on US banks to make sub-prime mortgage loans by the government. Without the massive numbers of sub-prime loans that got bundled and sold as "solid" investments we wouldn't have had the large financials getting slaughtered when the real estate bubble burst. Without Fannie and Freddie backing all those sub-prime loans tax payers wouldn't have suffered billions of dollars of losses. It's kind of like the old saying..."It doesn't pay to fool Mother Nature." In this case it didn't pay to to go against sound banking principles just to push a political agenda.

 

[boedicca]

another amateur with a hate on and doesn't even know why, except the media has told him to protect the messiah.

you have not the slightest idea of the topic.....hence of what you are discussing, 30 seconds of Google can take one only so far eh? ...go read a friggin book,..... dopey.

Is that all you guys have is insults?

If you'd actually studied the economy back when Reagan took over from Carter you'd know that the single biggest problem we faced back then was Stagflation. Reagan's first order of business was to correct that. He did so by having the Fed tighten up the money supply. In doing so he made the economy contract and increased unemployment...hence his low levels of popular support almost three years into his Presidency. Once Reagan had inflation under control he cut taxes and government regulations and the economy took off giving us the longest single sustained period of economic growth in our countries history.

Now contrast THAT with what Barack Obama has done.

The fact is our current President has used the Fed to lower interest rates to near 0% and he STILL can't get unemployment to drop. There is nothing that Obama's done since taking office that's going to lead to the same kind of economic surge as Reagan produced because he hasn't paid the price leading up to this point. He blew a trillion dollars of borrowed money on a stimulus plan that was more liberal pork fest then stimulant, adding so much to the deficit we have that we had our credit rating downgraded.

Indeed. Reagan inherited Stagflation - Obama created it.

Thanks Obama!

 

[boedicca]

Is that all you guys have is insults?

If you'd actually studied the economy back when Reagan took over from Carter you'd know that the single biggest problem we faced back then was Stagflation. Reagan's first order of business was to correct that. He did so by having the Fed tighten up the money supply. In doing so he made the economy contract and increased unemployment...hence his low levels of popular support almost three years into his Presidency. Once Reagan had inflation under control he cut taxes and government regulations and the economy took off giving us the longest single sustained period of economic growth in our countries history.

Now contrast THAT with what Barack Obama has done.

The fact is our current President has used the Fed to lower interest rates to near 0% and he STILL can't get unemployment to drop. There is nothing that Obama's done since taking office that's going to lead to the same kind of economic surge as Reagan produced because he hasn't paid the price leading up to this point. He blew a trillion dollars of borrowed money on a stimulus plan that was more liberal pork fest then stimulant, adding so much to the deficit we have that we had our credit rating downgraded.

Carter or Reagan have no control on whet the Fed does. Fed plays politics with the American economy(but thats another thread) Obama was left with a much bigger mess than Reagan. And Carter didn't help himself by pissing off the middle east and trying to make America energy independent. Carter didn't reaslize how shortsighted and selfish Americans are....

Absolute hysterical revisionism.

The economy Reagan inherited was in just as bad of a mess as the one Obama did. The difference is that Reagan did things to spur economic growth; Obama's policies has squashed it. The results being high REAL job creation under Reagan vs. job losses under Obama.

Thanks Obama!

 

[boedicca]

Can consumers?

This what it looks like:

Gee - that Federal Policy of encouraging people to buy homes they couldn't afford worked out Just Great.

 

[Big Fitz]

outlawing redling did not force banks to make bad loans. And the main reason for the crah was the inflating of housing prices by wall street using fraud.

Why Isn't Wall Street in Jail? | Rolling Stone Politics


Not a single executive who ran the companies that cooked up and cashed in on the phony financial boom — an industrywide scam that involved the mass sale of mismarked, fraudulent mortgage-backed securities — has ever been convicted. Their names by now are familiar to even the most casual Middle American news consumer: companies like AIG, Goldman Sachs, Lehman Brothers, JP Morgan Chase, Bank of America and Morgan Stanley. Most of these firms were directly involved in elaborate fraud and theft. Lehman Brothers hid billions in loans from its investors. Bank of America lied about billions in bonuses. Goldman Sachs failed to tell clients how it put together the born-to-lose toxic mortgage deals it was selling. What's more, many of these companies had corporate chieftains whose actions cost investors billions — from AIG derivatives chief Joe Cassano, who assured investors they would not lose even "one dollar" just months before his unit imploded, to the $263 million in compensation that former Lehman chief Dick "The Gorilla" Fuld conveniently failed to disclose. Yet not one of them has faced time behind bars.

I call bullshit. You can't force someone to make loans to someone who can't afford it, and then expect the lending institution to remain financially stable. That's just plain fucking logic. It's wishful thinking to believe otherwise. I know you don't leave liberal fantasyland, but those theories don't work here in the real world were cause and effect don't give a shit about feelings and 'nice'.

The major reason why Canada hasn't experienced the painful crash of their real estate as we did is that in Canada banks were still getting a substantial down payment before approving home loans. One could make the argument that this whole crash can be traced to pressure on US banks to make sub-prime mortgage loans by the government. Without the massive numbers of sub-prime loans that got bundled and sold as "solid" investments we wouldn't have had the large financials getting slaughtered when the real estate bubble burst. Without Fannie and Freddie backing all those sub-prime loans tax payers wouldn't have suffered billions of dollars of losses. It's kind of like the old saying..."It doesn't pay to fool Mother Nature." In this case it didn't pay to to go against sound banking principles just to push a political agenda.

Not everyone should be owning a home. This is just an unfortunate fact of life.