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Regannomicis

A

Alcott

Well-Known Member
Site Supporter
Reagan's economic policies were a success for a time. Certainly they were for me, as I had just saved my first $15,000 when the IRA was introduced, and put $10,000 into a 6 month CD at 14% [renewed at 11.57%]. But the market never goes one direction indefinitely, then there was the crash of '87. I'm sure we'll discuss when there will be another recession or crash, and we know the democrats hope it's within the last year of Trump's first term.
 
KenH

KenH

Well-Known Member
We don’t have the same economy as then. The economy has been growing for years. The unemployment rate is extremely low. Babyboomers, such as myself, are either retired or soon heading that way, not looking for full time employment.
 
TCassidy

TCassidy

Late-Administator Emeritus
Administrator
Reaganomics is simply Supply Side Economics in national application. (Remember, Reagan's degree is in economics.)

The problem with Supply Side Economics (as well as most economic systems) is that it tends to under-emphasize the phenomenon of "regression to the mean."
 
FollowTheWay

FollowTheWay

Well-Known Member
Site Supporter
Salty said:
Ronald Reagan proposed "Reaganomics" back in 1980

Do you think it was a success or not.

Do you think that the current Tax cuts that Trumps wants is in the same league as Reaganomics?
Click to expand...
In short, they were a disaster then and would be a far greater disaster now. GHW Bush called Reaganomics "Voodoo Economics" and I agree with him.

Economists disagreed over the achievements of Reaganomics. Tax cuts plus increased military spending would cost the federal government trillions of dollars. Reagan advocated paying for these expenses by slashing government programs. In the end, the Congress approved his tax and defense plans, but refused to make any deep cuts to the welfare state. Even Reagan himself was squeamish about attacking popular programs like Social Security and Medicare, which consume the largest percentages of taxpayer dollars. The results were skyrocketing deficits.

The national debt tripled from one to three trillion dollars during the Reagan Years. The President and conservatives in Congress cried for a balanced budget amendment, but neither branch had the discipline to propose or enact a balanced budget. The growth that Americans enjoyed during the 1980s came at a huge price for the generations to follow.
Reaganomics [ushistory.org]
 
AwesomeMachine

AwesomeMachine

Member
Yes, Reagan's policies worked. Tax regulations are always retroactive for those who owe past taxes. So, when the tax rate is lowered, those who owe are less willing to conceal the fact. After the Reagan tax cuts, the government took in more receipts than any previous year.

Cutting taxes makes it less profitable to cheat, so more people are willing to pay. This increases revenue. The economy tripled in size during the Reagan years, so the tripling of the deficit had the effect of remaining the same.

The stimulus created by Reagan continued through most of the Clinton years. I know a significant tax reduction would rocket-propel the economy into prosperity, but Trump is not proposing a tax cut. He's proposing a shell game where taxes are just moved around. Eliminating the tax on interest payments deduction is political suicide, because it discourages home ownership. That alone could collapse the housing market.

Eliminating the deduction on state taxes is also suicide, because it's fundamentally unjust. Simply raising the standard deduction is not the way to go, unless the taxpayer can deduct the standard deduction from his income to make a lower tax bracket.
 
FollowTheWay

FollowTheWay

Well-Known Member
Site Supporter
TCassidy said:
Both ITL and I have "put up" so, do you want to admit we were right or are you just going to ignore it, again?
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I don't see how your chart supports your point but I'll look at it in more detail. My quick take is deficits are more important than receipts. These increased during the Reagan and GHW Bush administrations and then went down during the Clinton administration. The table conveniently left off 1997-1999 in which Clinton had surpluses in constant $. Reagan spent the most of any recent President including Obama, measured as annual average % GDP.

Secondly, the top tax rate doesn't tell the whole picture. While Reagan reduced the top tax rate he INCREASED the lowest tax rate. This was the first time in American history this was done. In 1982 Reagan agreed to a rollback of corporate tax cuts and a smaller rollback of individual income tax cuts. The 1982 tax increase undid a third of the initial tax cut. In 1983 Reagan instituted a payroll tax increase on Social Security and Medicare hospital insurance. In 1984 another bill was introduced that closed tax loopholes. According to tax historian Joseph Thorndike, the bills of 1982 and 1984 "constituted the biggest tax increase ever enacted during peacetime"

The bipartisan 1986 act aimed to be revenue-neutral: while it reduced the top marginal rate, it also cleaned up the tax base by removing certain tax write-offs, preferences, and exceptions, thus raising the effective tax on activities previously specially favored by the code. Ultimately, the combination of the decrease in deductions and decrease in rates raised revenue equal to about 4% of existing tax revenue.

Therefore, I'd say that Reagan and GHW Bush initiated the serious problem of deficits. Clinton reduced them and eventually ran a surplus while increasing the top tax rate.
 
TCassidy

TCassidy

Late-Administator Emeritus
Administrator
Blah blah blah blah. The fact remains, Personal income tax rates went down and federal revenue went up. But you just can't admit it, can you?
 
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