Reaganomics

Discussion in 'Economics' started by OddTrader, Aug 2, 2017.

  1. https://en.wikipedia.org/wiki/Reaganomics

    Debt and government expenditures

    Reagan was inaugurated in January 1981, so the first fiscal year he budgeted was 1982 and the final year was 1989.

    * During Reagan's presidency, the national debt grew from $997 billion to $2.85 trillion.[22] This led to the U.S. moving from the world's largest international creditor to the world's largest debtor nation.[23] Reagan described the new debt as the "greatest disappointment" of his presidency.[24]

    * The federal deficit as percentage of GDP rose from 3.8% of GDP in fiscal year 1982 to a peak of 5.9% of GDP in 1983, then fell to 2.7% GDP in 1989.[60]

    * The federal government spent an average of 21.6% GDP from 1982–89, versus the 1974–1981 average of 20.3% GDP.

    * Federal revenues averaged 17.5% GDP from 1982–89, versus the 1974–81 average of 17.8% GDP.

    * Federal income tax revenues fell from 9.1% GDP in 1981 to a trough of 7.5% GDP in 1984, then rose to 8.0% GDP in 1989.[61]
     
  2. Last edited: Aug 2, 2017
  3.  
  4.  
    Last edited: Aug 2, 2017
  5.  
    Last edited: Aug 2, 2017
  6. volente_00

    volente_00

    But I thought republicans are conservative ?

    :D
     
  7. It'd be not impossible that for a conservative party to spend more money overall while saying they saved much money, in the same way that a progressive party to spend less committed money overall while saying they used much money.

    So that the superficial impression would be, the public cannot see well where the conservative party actually spent so much money, nor feel angry knowing the progressive party actually have never spent what they should have used.

    Conspiracy theory - worth 2 cents! LOL :D

    https://elitetrader.com/et/threads/...nt-to-pardon-himself-and-others.311493/page-4
     
    Last edited: Aug 2, 2017
  8. piezoe

    piezoe

    There is a litany of Reagan era economic initiatives that were very bad for the country in the long run. That's why he was at the same time one of the nations most charismatic presidents and one of the worst, although it now looks like Trump will easily surpass him in terms of damage done. Though any conclusion based on a sample size of two is shaky at best, perhaps there is a lesson here for us Americans. Let us not allow ourselves to be so mesmerized by the person that we become deaf to the insanity of their message.

    One bad thing Reagan's administration did was to wring nearly all the progressiveness out of the U.S. income tax structure by the 1988 tax year , when the effective rates and brackets became 15/28% This represented a 3% rise in the rates for those formerly in the lowest bracket and a gargantuan decrease for those formerly in the top bracket. Like a bad hangover, the ill effects of this brief period of tax insanity are still with us today .

    The 1986 tax Bill was quite sensible in calling for 11%/15%/28%/35%/38.5% brackets in tax year 1987, though one more bracket at the top of about 45% was needed. By 1988 the rates became 15/28/33%, but tax "magic" was worked so that the effective rate for incomes above a certain level worked out to 28% rather than 33%. Essentially we were down to just two brackets 15/28 with a total span of only 13 points. The 1988 rates were the genesis of the outsized wealth disparity we have in the U.S. today, a wealth disparity that is self-propagating at an ever increasing rate. (Another important factor is lower rates on unearned income. That was briefly undone, but has returned)

    Of all the screwball economic theories experimented with during the Reagan era, supply-side, or what we not so affectionately call "Trickle Down" or "Voodoo Economics" was the worst, and overall it is ill-applied, supply-side economics that has done the most damage.

    Trickle down economics is like a zombie that refuses to die. Republican politicians still spout this nonsense on "Meet the Press." The stay mum, however, about trickle down when on the stump. They know the haberdashers, barbers, and tradesmen that elect them are not going to believe that making Bill Gates richer is going to make them one iota less poor. Instead, they sell their minions on the need for more military spending to protect us from Kim Jong-un and the rapists streaming across our Southern borders to steal their jobs.

    It's been said that truth is the first casualty of war, but I wonder if that's not every bit as true of politics as well.
     
    Last edited: Aug 3, 2017
  9. ???


     
    Last edited: Aug 4, 2017
  10. piezoe

    piezoe

    I want to add one more observation. The 1988 Reagan era tax rates provide costly evidence of how a Steve Forbes "flat tax" could transition the United States at light speed from respected member of the community of enlightened nations to Banana Republic. We never quite got to totally flat in 1988, but we came too close with a spread of only 13 points from top to bottom bracket. The horrible effects of this brief period of tax insanity still haunt us today. When the Reagan administration experimented with tax rate compression the wealth distribution in the U.S. was still reasonable. Considering however the after effects of that brief period of tax craziness, just imagine what going all the way to "flat" would do with our present, lopsided wealth distribution already in place!

    Steve Forbes continues to push a flat tax to this day. There is no question that for those fortunate few with inherited family wealth a flat tax would work pleasant miracles. But there is also no question that Steve Forbes' "flat tax" would be a disaster for 90% of the population. Were we to adopt Forbes' idea, the wealthy would continue to officially reside in the United States but spend their time in Monaco to escape U.S. squalor. Apparently sucking on a silver spoon does not impart wisdom.
     
    #10     Aug 4, 2017