Cruentus
Grandmaster
Well actually what Reagan did to the economy was revolutionary.
I respect your colorful explaination, and your zeal in your support for Reagans economic policies. Unfortunatily, very little of what you say in regards to Reagan uplifting the american economy is true.
The bull market from 1982 to 2000 (I correct myself from my last post because the economic bubble tappered off in 2000, even though the true bear didn't hit til 2001) was all part of the economic cycle that the economy has followed for the past 200 years. This is regardless of tax cuts, republicans, democrates, or size of economy and businesses, or the size of my wiener. The public is generally reactionary when it comes to the economy, which is why the average investor fails to outperform the indecies. Reaganomics had little to do with the 1982 upturn of the economy anymore then Clintonomics had to do with the prosperiety during his administration, anymore then Bushinomics had to do with the downturn that occured during recent years.
Now, when there is a reversal, how the government reacts can make a huge difference. Government may only be a small factor in the cycle, but it is a huge factor in how citizens handle the cycles, whether boom or bust. The G.W. Bush administration was trying to follow the Reagan model in regards to tax cuts to try to force a speedy recovery, which was a big mistake. Reagan's term was at the end of a cyclical stagnant market and the beginning of a bull; "tax cuts" did little to help or hurt that. Tax cuts in the beginning of an economic bear, however, hurts in this case, because the government spends more during the bear (while people are supposed to spend less) to help cushion the blow. This president spent more, told us to spend more, and taxed less. What does this equal? An extremely high defecit, that's what! It would be like lossing your job, spending more money because of it, except charging everything on a high interest credit card. Not too intelligent. An individual would bankrupt, as will our country if we aren't careful.
Understanding the deficit and how it relates to us is like trying to understand how inflation works, because both are barely tangable concepts. If the inflation rate is 3% a year, that means if you put a 100 dollar bill under your bed for a year, the purchasing power of that dollar would be worth 97 dollars from the previous year. The value of that 100 would continue to decrease at the rate of inflation in subsequent years. Why? Because inflation describes "purchasing power," not the value of the dollar itself. In other words, as inflation goes up, you can buy less crap with the dollar you have in your pocket. The deficit is a similar thing to understand. It was estimated that by 2010, for the average family, 8 to 10 K a year will go towards the deficit created during this administration. People generally don't understand this, because it's not like you write a check for the deficit every year any more then your dollar turns to 97 cents magically before your eyes at a 3% inflation rate. You pay the deficit through the increase of consumer goods and through tax dollars.
So, in the long run, the Bushenomics Tax cuts not only did nothing to stimulate the economy, and did nothing to create jobs, but it screwed the poor, and the working lower to upper middle class in the long run. That few hundred bucks extra will have to be paid back by the thousands in years to come.
Sorry to go on a diatribe on the Bush mistake, but this relates to Reagan as well. I don't know if during his administration, a tax cut was needed or not, but I do know that the timing for it was a hell of a lot better then our recent cuts. Simply put, if the people are overtaxed, then a cut is needed. If the government is underfunded, then an increase is needed (conservatives often fail to recognize the second part). It is greatly counter-productive, however, when these cuts create a deficit. Surely, it would help if the government wouldn't waste money on corporate welfare and projects that are only designed to employ companies who can afford expensive lobbiests; then we could have the best of both worlds...lower taxes with a properly funded socially conscience government. Ah....only in a perfect world.
Now, Regean gleefully spent money on unnessicary crap; but he wasn't as bad as George W.. Whether his tax cuts were justifiable...I honestly don't know enough on that history to answer yes or no.
However, One thing I do know is this: the idea that reaganomics pulled us out of an economic slump is absurd, and in violation of many basic economic principles, including (but not limited too) the "effecient market theory" that conservatives enthusiastically believe.
Anyhoo, disagree if you'd like, but you'll have to provide a serious source to make me even consider a different viewpoint on this one.
Sorry for the economics 200 lesson...
PAUL