A repeat of Reaganomics

[OntarioVanMan]

In 1982 Pres. Reagan signed a "stimulus bill of a staggering $750 Billion dollars....one of the things that happened was investment in the Hi-Tech market...Dot com companies and the home computer flourished and America went High tech!
The American economy came out of recession

According to a 1996 study[29] from the libertarian think tank Cato Institute:

• On 8 of the 10 key economic variables examined, the American economy performed better during the Reagan years than during the pre- and post-Reagan years.
• Real median family income grew by $4,000 during the Reagan period after experiencing no growth in the pre-Reagan years; it experienced a loss of almost $1,500 in the post-Reagan years.
• Interest rates, inflation, and unemployment fell faster under Reagan than they did immediately before or after his presidency.
• The only economic variable that was worse in the Reagan period than in both the pre- and post-Reagan years was the savings rate, which fell rapidly in the 1980s.
• The productivity rate was higher in the pre-Reagan years but much lower in the post-Reagan years.

 

[greg334]

OVM,
Are you sure?

I know he had the Economic Recovery Tax Act of '81 and the Tax Equality Act of '82 which adjusted the former but not spending $750 billion like Obama.

The key to Reagan was deregulation with the lowering of taxes.

 

[OntarioVanMan]

Greg..I am researching if it was bundled in part of either Bill...

Further....
To quote R Reich...former Sec of Labor

to go back to the days of those very high tax rates that we had in the 1970s when you had 80 percent tax rates when you combined federal and state taxes. So I think the lesson we learned is that when taxes get too high they stifle private creativity and wealth creation, and I see the real evidence of this all over the world where countries really are moving towards Reaganomics by lowering their taxes

 

[greg334]

I would be surprised that Reich said that, he advocated higher taxes for the longest time and he really is a twisted individual when you read some of his stuff...

 

[OntarioVanMan]

I would be surprised that Reich said that, he advocated higher taxes for the longest time and he really is a twisted individual when you read some of his stuff...

You are correct it was Stephen Moore...

This is Reich...

Only that a lot of Americans in the 1980s began paying more in payroll taxes, in Social Security taxes as a result of a very important reform that Ronald Reagan and Alan Greenspan put through, but those increases in payroll taxes have actually for most Americans more than compensated for, more than took away any tax reduction they had in income taxes, and that legacy lives on to this day.

 

[greg334]

read Reich's book Reason: Why Liberals Will Win the Battle for America

 

[OntarioVanMan]

read Reich's book Reason: Why Liberals Will Win the Battle for America

You said he was twisted....

Sorry..I can't find anything right now to back up my statement...grrrrrr...

 

[Pilgrim]

A Reagan Stimulus Bill is news to me - seemed like his emphasis was on lowering taxes to encourage private enterprise. Anyway, for anyone interested in a little light reading on economics here's a couple of good articles about the Reagan economic policies.

Bruce Bartlett on Tax Increases & Reagan on NRO Financial

"...In 1982, Ronald Reagan proudly announced that he was getting $3 of spending cuts for every $1 of tax increase. He later lamented that all he ever got were the taxes. "Congress never cut spending by even one penny, " Reagan complained in 1993."

The Reagan Tax Cuts: Lessons for Tax Reform

Note the graph from the second article that shows how the tax contribution from the wealthy was actually increased and the middle-class burden was decreased.


Click here to see Figure 1.

The stimulus of the 1980's came from the reversal of Jimmy Carter's ridiculous economic policies, lowering the marginal income tax rates and letting people and businesses keep more of their own money to spend/invest. This created increased revenues to the government from the increase in business productivity.

 

[greg334]

Actually a better place to read about this is

Laffer Curve

And this should be a lesson to a lot of soak the rich folk;

In 1924, Secretary of Treasury Andrew Mellon wrote, "It seems difficult for some to understand that high rates of taxation do not necessarily mean large revenue to the Government, and that more revenue may often be obtained by lower rates." Exercising his understanding that "73% of nothing is nothing" he pushed for the reduction of the top income tax bracket from 73% to an eventual 24% (as well as tax breaks for lower brackets). Personal income-tax receipts rose from $719 million in 1921 to over $1 billion in 1929, which supporters attribute to the rate cut. - Folsom Jr "The Myth of the Robber Barons"

 

[letzrockexpress]

OVM,
Are you sure? I know he had the Economic Recovery Tax Act of '81 and the Tax Equality Act of '82 which adjusted the former but not spending $750 billion like Obama.

The key to Reagan was deregulation with the lowering of taxes.

Greg is correct. It was deregulation and tax cuts. "Reaganomics" is by far the best economic model our country has seen in the past 100 years, Theoretically. For every tech or mfg. job, 2 to 3 service jobs were created. Tax cuts were to allow big business to expand, using the tax savings, allowing prosperity to "trickle down". The problem was that greed took over and rather than expand, the companies lined their pockets with the money. A brilliant plan, but because people were involved, it blew up.
Mean old Mr. Greed....

 

[letzrockexpress]

Actually a better place to read about this is

Laffer Curve

And this should be a lesson to a lot of soak the rich folk;

In 1924, Secretary of Treasury Andrew Mellon wrote, "It seems difficult for some to understand that high rates of taxation do not necessarily mean large revenue to the Government, and that more revenue may often be obtained by lower rates." Exercising his understanding that "73% of nothing is nothing" he pushed for the reduction of the top income tax bracket from 73% to an eventual 24% (as well as tax breaks for lower brackets). Personal income-tax receipts rose from $719 million in 1921 to over $1 billion in 1929, which supporters attribute to the rate cut. - Folsom Jr "The Myth of the Robber Barons"

Funny you should mention Andrew Mellon, as what we refer to as "Reaganomics" was once refered to as "Mellonomics"