America’s Economic Future: More Reaganomics, or Something That Works For Everyone?

June 17, 2010

Like it or not we have a rare critical, but limited, oppertunity to decide exactly what kind of economic policies we want to pursue in this country. Obviously the policies over the past 30 years, especially the last decade, have not worked, benefiting only a small select group, leaving the vast majority of citizens either stagnated or in a decline. Some were even completely wiped out, with more likely to follow. I have little doubt that the policies of old will dominate though, as those who have benefited from Reaganomics and Bush-two-nomics have amassed such great wealth they now control not only the economy but the lawmakers who might have some impact on economic policies. However, it doesn’t change the facts.

Reaganomics is often — very often — pointed to as the cause of one of the greatest economic growths in American history. If you are one of the select few, that’s true. But if you are in the bottom 80 to 70 percent, not so true.

What exactly is Reaganomics by definition?

  • Reduce government spending,
  • Reduce income and capital gains marginal tax rates,
  • Reduce government regulation of the economy,
  • Control the money supply to reduce inflation.

In other words (except for the first), trickle-down-economics — or for a very quick understanding, see this.

As with all Presidents, Reagan has a lot of his quotes documented. Here’s a few.

1. “Concentrated power has always been the enemy of liberty”.

And where is the power concentrated today? In the top 1 percent. Choose any source you want, but “Who Rules America” is one. And it had already taken hold by 1995. In 2010 it has become a “Radical Concentration of Wealth Destroying Both Capitalism and Democracy”.

2. “To sit back hoping that someday, some way, someone will make things right is to go on feeding the crocodile, hoping he will eat you last – but eat you he will”.

Let’s see now: Wall Street, Wall Street bankers, health care industry, BP, and others. Yeah, let’s leave them alone and they will make things “right” — for them.

3. “You know, if I listened to Michael Dukakis long enough, I would be convinced we’re in an economic downturn and people are homeless and going without food and medical attention and that we’ve got to do something about the unemployed”.

One at a time:

  1. Economic downturn” – Although it had a lot to do with the previous administration, we had a “severe recession” in 1981 that lasted until late 1982. And let’s not forget the “Saving and Loan Crisis” of the 1980’s brought about by Reagan’s deregulation of the S&L banks in 1982 (called “a Reagan Administration initiative”), which cost taxpayers about $800 billion and hundreds of thousands of jobs and future’s.
  2. Homeless” – Go no further than here: “the period when chronic homelessness became a modern problem on a larger scale”. If that’s not good enough for you, try this one or this one.
  3. Hunger – “The understanding of the epidemiology of hunger among children in the United States advanced significantly in the early 1980s” – from the American Academy of Pediatrics, Vol. No. 1 January 1998. Backed up with “As poverty increased in the United States during the 1980s”. Then, poverty in America rose higher during the 1980’s more than any time since the mid-1960’s. The highest level of poverty over the past 33 years was in 1983 at 15.2 percent.
  4. Medical attention” – OK, other than the “soaring medical cost in the mid-1980s”, there is little to support a “medical attention” problem existed. However, could there be any doubt that millions couldn’t afford the higher cost of medical attention?
  5. Unemployment” – So what was the unemployment during Reagan’s eight years? Well, an awful lot of people like to deny it and will quote you their own set of unconfirmed biased figures. But American workers didn’t fare too well under Reagan. From the Bureau of Labor Statistics you will find that unemployment was at 7.6 percent in 1981, rising to a high of 9.7 percent, then back down to 5.3 percent in 1988. Rising unemployment then continued for the next 4 years under Bush I, mostly from Reagan’s policies.

So, President Reagan, maybe you should have listened to Michael Dukakis! But then again, Dukakis represented those that weren’t within the elite circles you cared about, were they?

4. “I am not worried about the deficit. It is big enough to take care of itself”.

Aaaaaaaah!! Do I really need to point out anything here?? Do I??? Didn’t think so! However, Reagan had a very, very, very, very good reason to make this “famous quote”. He was on his way to increasing our national debt by 189 percent (Follow links in left sidebar for confirmation).

And finally:

5. “Status quo, you know, is Latin for ‘the mess we’re in’”.

Good for you, Mr. President!! Very appropriate! “We’re in a mess” today, thanks in big part to your economic policies. However your admirers insist you had nothing to do with that, and demand the status quo continue. But that’s not what the facts say.

When Reagan left office his eight year administration was accountable for 64 percent of all the debt incurred by this government since the beginning of the republic. The interest payments required to finance the debt created under his administration has exceeded more than $100 billion a year every year since he left office. If one calculates the compounding effect of the debt and the interest payments on the debt the cost to the Treasury thus far has been more than $3 trillion”. [bold added]

These figures are easily confirmed. Just do the math. It really isn’t hard. If I can do it, any idiot can. 

As I mentioned earlier, there are those Reaganites who will make up their own set of “facts” to “prove” how great Reagan was for America. And the Republican Party, supported by their number one champion, Fox whatever, have seen to it that Reagan gets nothing but kudos’. But Scott Lilly said it right in 2004: “Let Reagan be Reagan”. And as with most Presidents — Bush II almost an exception — Reagan had good’s and bad’s. Unfortunately, for the good of the country, Reagan’s report card comes down on the “bad’s” side. Lilly:

Economy

The U.S. economy entered an economic downturn in the summer of 1981 following the passage of the president’s tax and budget proposals. Bond traders began unloading U.S. Treasuries in August 2001 and the collapse of bond prices was quickly followed by a decline in stock prices. Unemployment swelled to more than 10 percent of the workforce. Over the eight years of the Reagan administration unemployment averaged more than 7.5 percent – a full percentage point above the average of the previous administration”.

Poverty

More people lived in poverty during the Reagan administration. The average number of people living under the poverty line during the eight years of the Reagan administration was 33.1 million, 25 percent more than the 26.2 milion [sic] living in poverty during the previous administration.”

Middle Class

Many American workers confronted falling wages during the Reagan administration. The real (inflation adjusted) median money income of American men working year round and full time fell by nearly 1 percent during his eight years in office. More married mothers were forced to accept employment to offset the declining earning power of men.”
[bold in paragraphs added]

“davej” over at Daily Kos is one of those who care’s enough about the truth to do some research on Reaganomics. In “Reagan Revolution Home To Roost – In Charts”, davej gives us a very good visual look at just how our economy faired under Reagan, exactly who benefited from it and who didn’t. Some of his charts are below. However, I recommend you read his post as he sort of puts them in perspective.

One of the reasons I decided to write a post on this is because of the working class stiffs who continue praising Reagan time and time again. In fact, I recall one of them saying to me in a very threatening manner that I’d better not say anything bad about Reagan. That said by a man who was only in his teens when Reagan was President, therefore what he knew was what he’d been told, mostly by Fox Liars. Naturally I responded with telling him just what kind of fake Reagan was and exactly who Reagan served as President. But I digress — this country is still suffering from Reagan’s economic policies, just as we will be suffering for decades due to the Bush II Presidency. Most likely the country will never recover, thanks to those who have been assimilated like my political nemesis.

PAY CLOSE ATTENTION TO THE FIRST TWO

Creditor Nation to Debtor Nation



Workers Share of Benefits from Increased Productivity



Concentration of Wealth



Workers Started Spending Savings Just to Get By



Workers Debt as Percentage of GDP



GDP Growth Rate



lemming



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