Silver Anniversay of Reaganomics

[Pilgrim]

It is an honor to vote in any US election. It was an honor to vote for Reagan's opponents.

I've met George Bush Jr. (aka: The Shrub) and it was an honor to vote for his opponents, too. Both times.

 

[scotrace]

Don't pick my horses.

 

[Pilgrim]

[Donning Groucho glasses...]

Now THAT's a horse of an entirely different color!

[Wags eyebrows]

 

[Lincsong]

Blazing the trail

Thus today, the top marginal personal and corporate tax rates are 35% compared with 70% and 48% in 1981. In the late 1970's the tax on dividends was 70% and the capital gains rate was 50%; now they're both 15%. These reductions have increased the rate of return on capital, and hence some $3 trillion more was invested by foreigners in the U.S. between 1981 and 2005 than was invested by Americans abroad. One result: 40 million new jobs, more than the rest of the industrialized world combined.

In an earlier post I showed a table of tax rates of various nations in 1980 and 2004. What has all this meant?

The rest of the world meanwhile, has followed the Gipper down the tax-cut curve. Daniel Mitchell of the Heritage Foundation finds that the average personal income tax rate in the industrialized world is now 43% versus 67% in 1980. The average top corporate tax rate has fallen to 29% from 48%. This decline in global tax rate has been the economic counterpart to the fall of the Berlin Wall. Most of Eastern Europe has adopted flat tax rates of 25% or lower, and the Russians now have a flat income tax of 13%. In Old Europe, Ireland's corporate and personal income tax rate cuts have helped generate the swiftest economic growth in the EU.

Not bad for a President dismissed as a dreamy former actor. In his 1989 farewell address, Reagan said that "People say that I was a great communicator. It would be more accurate to say that I communicated great ideas." He was right, and a remarkable global prosperity has followed in his wake. :eusa_clap

 

[Lincsong]

Bush take notice this is "kinder and gentler"

Before he left office, inflation dropped from 13.5% to 4.1% and unemployment fell from 9.5% to 5.2% with the creation of nearly twenty million new jobs. Individuals and businesses could afford to borrow again as the federal discount rate went from 14% to 6.5%. Median family income rose 10% or more for the rich and poor every year under Reagan. The stock market doubled in value. Private investments rose by a third, helping fuel a 48% increase in manufacturing, and a 93% increase in U.S. exports. It was the greatest peacetime economic expansion in American History.

AND THIS IS THE DEFINITION OF COMPASSIONIATE CONSERVATISM

 

[Terry Lennox]

I love the fact that you love this man so much.

 

[Lincsong]

Not the man per se, but his accomplishments

In his first Inaugural Address on January 20, 1981 Ronald Reagan said; 'We have every right to dream heroic dreams.... There are entrepreneurs with faith in themselves and faith in an idea who create new jobs, new wealth and opportunity."

In 1983, I was in the eighth grade and my economics teacher (this was California) had a satire poster in class of Reagan dressed as Robin Hood with sacks of money at his feet and the caption; Ronnie Hood, taking from the poor to give to the rich. :rage: I have to laugh now at how wrong that teacher was at the time. (A man whom I might add owned several apartment buildings in town so he wasn't exactly living hand to mouth). In that class in the eighth grade we talked of "entrepreneurs" and I remember him saying that it was not a commonly used term until the 1980's. For that he was correct.

The word "entrepreneur" was almost unknown before Ronald Reagan became President. His policies of more freedom, lower taxes, and less regulation unleashed America's genius, creativity, and boundless energy. Jobs created through self-employment and proprietorships went from 5% when Reagan became president to almost double that by the 1990's, and now account for nearly one-third of all jobs today! The Reagan years led to an explosion of new American products such as computers, videos, and cell phones that continue improving our lives.:eusa_clap

 

[Hiram]

Looking at the statistics published by various agencies is all well and good, but I like to do what I call "The Real Life Test."

I'm looking around the streets in my city and those I visit, and I'm not seeing much prosperity for the average person.

• I am seeing more and more small business boarded up and empty and staying empty for years—sometimes as many as four or five to a block. But I'm also seeing an increasing infestation of office buildings.

• I'm seeing a lot more homeless people than ever before.

• More and more of my friends and acquaintances have a tougher time finding a decent job.

• Good health care is out of reach for more people.

• I'm seeing people who are grateful when gas prices drop below $3.00 a gallon.

• The one-income family is a thing of the past. Singles must more often resort to roommates just to make the rent.

What I'm seeing now is not prosperity for the average American.

I'm inclined to think that anyone who thinks that this is prosperity, has either forgotten or hasn't been around long enough to remember what real prosperity was like.

 

[Lincsong]

You have made some valid arguments;

Many of your observations are the result of poor planning and greedy local governments and bureaucrats.

Empty storefronts? Is this because there are not any customers for the stores? or Is this because of local zoning boards that are keeping businesses from opening up? Here in the San Francisco Bay Area in some towns it takes 1 year for all the permits to be approved before a business can start up. In San Leandro, a lower-middle class city, Albertson's closed a store in downtown about 18 months ago. Several businesses wanted to move in but the City rejected all of them because they want "upscale" retail there.:eusa_doh: It took 5 years for San Leandro to approve an In N Out restaurant.

Finding a hard place to live? Here in the San Francisco Bay Area 97% of all new construction has been effectively halted. 1.5 million acres are off limits to housing development, with 7 million people it is stupid to think that the existing dwellings are going to provide for that many people.

Health Insurance? In California, the high cost is all the result of costly mandates and regulations. Policies were way cheaper in 1998 than today. This is a result of former Governor Gray Davis and the Legislature piling on more and more madates and regulations. Swartzenegger has been marginially better than Davis but not by much.:rage:

 

[Lincsong]

Contrary to Academics

Contrary to the mantra from liberal public officials, media and academics, the 1980's were not a "Decade of Greed" where the rich got richer on the backs of the poor. President Reagan's tax program actually took a bigger share from the rich. Under Reagan, taxes paid by the top 5% of wage earners rose from 9% to 18% of the total -- even though the top tax rate was cut nearly in half. Taxes paid by the bottom 20% of the wage earners dropped from 6% down to just 2% of the total.

 

[Hiram]

You have made some valid arguments...

Not arguments; no interpretations of cause or blame, just observations.

I rarely discuss politics, I was just relating what I see around me. Whatever is being done by whoever is doing it, it ain't working very well.

 

[Lincsong]

wrong word

Not arguments; no interpretations of cause or blame, just observations.

I rarely discuss politics, I was just relating what I see around me. Whatever is being done by whoever is doing it, it ain't working very well.

Valid observations.

 

[Maj.Nick Danger]

Not arguments; no interpretations of cause or blame, just observations.

I rarely discuss politics, I was just relating what I see around me. Whatever is being done by whoever is doing it, it ain't working very well.

I'm seeing the same things here. It's as if the middle class is disappearing, and we are headed toward a 2 class society of the haves and the have not's. Not a good situation to say the least.
I hope that the next president can solve some of the problems we now face.

 

[Lincsong]

Stymied by the local Mayor?

You gentlemen have made valid observations. If you think the situations are troublesome like that in Ohio and Seattle then come to San Francisco Bay Area or Los Angeles and the same concerns are magnified by 100.

When President Reagan launched the longest peace-time economic boom ever, the tax burden of the lower and middle income families declined, while giving many Americans incentives to move their money out of tax shelters and into the productive economy, creating more wealth.

Here in California; local, county and state workers saw this tax cut as a reason and excuse to raise taxes locally to feather their bloated pay packages. Their excuse was all the same; "well, the national economy is doing fine so we shouldn't lower taxes, in fact people are getting such a big tax break at the national level, we can feel good in raising taxes locally because now people have money to pay the taxes." :eusa_doh: This mentality goes against micro-economics advocated by Milton Friedman and the Chicago School and explains the observations you've noticed around your locales. We should be looking towards the next Mayor, County Commissioner and Governor to alleviate the troublesome observations we notice around us.

 

[MK]

.

Not arguments; no interpretations of cause or blame, just observations.

I rarely discuss politics, I was just relating what I see around me. Whatever is being done by whoever is doing it, it ain't working very well.

Strange. We are in the same state, but my take is that things are fine for me and most people I know. I am doing better than I was 5 years ago.

I guess that is because I don't look to the government to meet my needs. I will succeed or fail due to my own efforts. Who is in office only has a small effect on me personally.