QUOTE (John Simkin @ Feb 14 2005, 07:23 PM)

(3) During his campaign for president he promised a "patriotic crusade" to reduce the size and scope of government, to rebuild American military power and self-respect and to restore traditional values". This campaign was based on the ideas of Reagan’s pollster, Richard Wirthlin. His polls showed that events such as Vietnam and Watergate had “shattered traditional confidence in America”. Wirthlin argued that Reagan campaign needed to reflect this problem and to offer ways it could be overcome.
Although there was a federal deficit of over $100 billion, Reagan managed to persuade Congress in 1981 to pass a plan for a three-year reduction in income tax rates (a total of 25%). This was followed by cuts in domestic spending. During the 1980s Reagan's policy of reducing income taxes and federal domestic budgets became known as Reaganomics. These tax changes and the dramatic cuts in the welfare system widened the gap between rich and poor. It also caused a deep recession.
John,
The false promises and ultimate failures of Reaganomics were what inspired me to begin my research into U.S. economics many years ago. Even when Reagan was elected, I simply could not accept that giving tax breaks to the wealthy was going to result in an equivalent (or even larger, as they predicted) windfall for the middle class. Logic tells us that demand side programs (refunds or rebates) for the working classes would at least have had a 100% payback (they save little or none of their income). However, giving a wealthy man $1 million and expecting him to invest even half of it into programs that employ others (not counting the illegals that tend their gardens, homes, and/or children) is a pipe dream. The wealthy already have access to capital and they were about to get even cheaper capital...
The early 1980s recession was actually engineered by Paul Volcker, chairman of the Fed from 1979-87 (and current Obama adviser), who cut the money supply in order to kill inflation (and employment) and then turned it back on to cause the mid-80s boom. Giving Reagan any of the credit for either the recession or the subsequent boom is inaccurate, although his reckless spending certainly did have economic effects.
The problem was that American growth during the 80s and 90s benefited the average worker less and less. By the 2000s, it was starting to become crystal clear (though still under reported by the MSM) that our aggregate profits are all being kept by those at the top or shipped overseas. How else can you explain the declines in real household income during a 25 year period that saw two record booms?
The press likes to cite things like the rise in mean home prices, incomes, and even assets (like retirement accounts), but they never mention the
median rise because (a) the average listener doesn't understand statistics, and ( b ) the median numbers look much worse. America has been continually creating record numbers of millionaires, it's just that they're riding on top of a growing underclass that doesn't vote, and thus has little chance to escape their predicament.
Read this for some more interesting insights on Reagan:
http://www.washingtonmonthly.com/features/...0301.green.htmlAnd, my favorite essay on Reagan, bar none:
Gore Vidal, "Ronnie and Nancy: A Life in Pictures" from
The New York Review of Books, September 29, 1983
...but thankfully reprinted in Vidal's masterwork, United States.