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Truth, what happened during Carter, as I have said before, was mostly beyond his control. But he handled it badly. His malaise speech summed up his presidency. During Nixon the economy was in trouble thus price controls and such. Ford didn't do much better but he was dealt a poor hand.
Debt is realive. A person may have a 1000 dollars in debt yet take a 100000 dollar loan to buy a house. Doesn't really matter that they increased their debt 10 times what matters is if they can afford the increase. As was witnessed Reagan increasing the debt produced an expansion in the economy which in my opinion was well worth the cost. Obama's MASSIVE increase in the debt in reality produced nothing measurable except the MASSIVE debt placed on our children.
Bottom line, Reagan made us proud again, Obama does not.
No, not really.
First, Reagan's "growth" of the economy wasn't all that much to brag about. The Middle Class lost ground, the rich got richer until they crashed the economy again in 1990. This was NOT a good thing.
But the real bad thing about Reagan's growth of the debt was that he instituted an attitude that persists to this day that borrowing with no intent to pay it back is okay.
In the past, you had a war or a recession, you raised taxes on the wealthy and after the crisis was over, you kept paying it down. That's what responsible people do.
Reagan's attitude was that it was okay to have debt as far as the eye could see because we wo uld "Grow" our way out of it. WHich never happened.
Reagan's debt was not as far as the eye could see, Obama's certainly is and if you are going to say no you really have to explain why.
A Joint Economic Committee reported in April 2000:2
In 1981, newly elected President Ronald Reagan refocused fiscal policy on the long run. He proposed, and Congress passed, sharp cuts in marginal tax rates. The cuts increased incentives to work and stimulated growth. These were fundamental policy changes that provided the foundation for the Great Expansion that began in December 1982.
As Exhibit 1 shows, the economic record of the last 17 years is remarkable, particularly when viewed against the backdrop of the 1970s. The United States has experienced two of the longest and strongest expansions in our history back to back. They have been interrupted only by a shallow eight-month downturn in 1990-91.
Even with the growing surplus, however, a small but vocal faction in Congress opposes any policies that would allow taxpayers to keep more of their own money through real tax cuts and that generally would shift power from the government to the people. This attempt to rewrite history should not be surprising. Proponents of additional government spending try to make the Reagan boom appear to be a bust because they fear that Reagan's success will help President Bush build popular support for lower taxes, further deregulation, and reduced government spending. But their rhetoric is easily countered by the evidence.
history confirms the soundness of the Reagan, and now Bush, approach to economic policy. Under President Reagan, federal revenues increased even with tax cuts, federal spending did not decrease, the country experienced the longest period of sustained growth during peacetime in its history, and the rich paid more taxes proportionately than they had before the tax cuts were implemented.
HOW DID THE REAGAN TAX CUTS AFFECT THE U.S. TREASURY?
Many critics of reducing taxes claim that the Reagan tax cuts drained the U.S. Treasury. The reality is that federal revenues increased significantly between 1980 and 1990:
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Total federal revenues doubled from just over $517 billion in 1980 to more than $1 trillion in 1990. In constant inflation-adjusted dollars, this was a 28 percent increase in revenue.3
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As a percentage of the gross domestic product (GDP), federal revenues declined only slightly from 18.9 percent in 1980 to 18 percent in 1990.4
◾Revenues from individual income taxes climbed from just over $244 billion in 1980 to nearly $467 billion in 1990.5 In inflation-adjusted dollars, this amounts to a 25 percent increase.
HOW DID REAGAN'S POLICIES AFFECT FEDERAL SPENDING?
Although critics continue to focus on President Reagan's budget "cuts," federal spending rose significantly during the 1980s:
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Federal spending more than doubled, growing from almost $591 billion in 1980 to $1.25 trillion in 1990. In constant inflation-adjusted dollars, this was an increase of 35.8 percent.6
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As a percentage of GDP, federal expenditures grew slightly from 21.6 percent in 1980 to 21.8 percent in 1990.7
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Contrary to popular myth, while inflation-adjusted defense spending increased by 50 percent between 1980 and 1989, it was curtailed when the Cold War ended and fell by 15 percent between 1989 and 1993. However, means-tested entitlements, which do not include Social Security or Medicare, rose by over 102 percent between 1980 and 1993, and they have continued climbing ever since.8
◾Total spending on all national security programs never equaled domestic spending, even when Social Security, Medicare, and net interest are excluded from domestic totals. In addition, national security spending fell during the Administration of the senior President Bush, while domestic spending increased in both mandatory and discretionary accounts.9 (See Chart 1.)
HOW DID REAGAN'S POLICIES AFFECT ECONOMIC GROWTH?
Despite the steep recession in 1982--brought on by tight money policies that were instituted to squeeze out the historic inflation level of the late 1970s--by 1983, the Reagan policies of reducing taxes, spending, regulation, and inflation were in place. The result was unprecedented economic growth:
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This economic boom lasted 92 months without a recession, from November 1982 to July 1990, the longest period of sustained growth during peacetime and the second-longest period of sustained growth in U.S. history. The growth in the economy lasted more than twice as long as the average period of expansions since World War II.10
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The American economy grew by about one-third in real inflation-adjusted terms. This was the equivalent of adding the entire economy of East and West Germany or two-thirds of Japan's economy to the U.S. economy.11
◾From 1950 to 1973, real economic growth in the U.S. economy averaged 3.6 percent per year. From 1973 to 1982, it averaged only 1.6 percent. The Reagan economic boom restored the more usual growth rate as the economy averaged 3.5 percent in real growth from the beginning of 1983 to the end of 1990.12
HOW DID REAGAN'S POLICIES AFFECT THE FEDERAL TAX BURDEN?
Perhaps the greatest myth concerning the 1980s is that Ronald Reagan slashed taxes so dramatically for the rich that they no longer have paid their fair share. The flaw in this myth is that it mixes tax rates with taxes actually paid and ignores the real trend of taxation:
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In 1991, after the Reagan rate cuts were well in place, the top 1 percent of taxpayers in income paid 25 percent of all income taxes; the top 5 percent paid 43 percent; and the bottom 50 percent paid only 5 percent.13 To suggest that this distribution is unfair because it is too easy on upper-income groups is nothing less than absurd.
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The proportion of total income taxes paid by the top 1 percent rose sharply under President Reagan, from 18 percent in 1981 to 28 percent in 1988.14
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Average effective income tax rates were cut even more for lower-income groups than for higher-income groups. While the average effective tax rate for the top 1 percent fell by 30 percent between 1980 and 1992, and by 35 percent for the top 20 percent of income earners, it fell by 44 percent for the second-highest quintile, 46 percent for the middle quintile, 64 percent for the second-lowest quintile, and 263 percent for the bottom quintile.15
◾These reductions for the lowest-income groups were so large because President Reagan doubled the personal exemption, increased the standard deduction, and tripled the earned income tax credit (EITC), which provides net cash for single-parent families with children at the lowest income levels. These changes eliminated income tax liability altogether for over 4 million lower-income families.16
