Reaganomics Vs. Obamanomics: Fallacies Offered By The Left

[Whovian]

interesting read.

Reaganomics Vs. Obamanomics: Fallacies Offered By The Left - Peter Ferrara - On The Cutting Edge - Forbes

From watching and participating in debates over the years regarding Reaganomics, patterns of logical fallacies and factual errors repeatedly arise among critics on the Left. As the troublesome facts demonstrating the failures of Obamanomics accumulate, we find that almost religiously minded supporters of President Barack Obama can’t deal with those facts, and exhibit analogous logical fallacies.

These are the reasons why the dramatic reductions in tax rates under President Reagan were the central factor in creating the dramatic turnaround in the economy that grew into the astounding, historic, 25-year Reagan boom, though the change in monetary policy was critical as well

Critics have the most fevered difficulties in dealing with the facts regarding the effects of these Bush tax cuts. They quickly ended the 2001 recession, despite the contractionary economic impacts of 9/11, and the economy continued to grow for another 73 months. After the rate cuts were all fully implemented in 2003, the economy created 7.8 million new jobs and the unemployment rate fell from over 6% to 4.4%. Real economic growth over the next 3 years doubled from the average for the prior 3 years, to 3.5%.

President Obama likes to pretend that a third of his trillion dollar stimulus involved tax cuts too. But those “tax cuts” all involved temporary tax credits which are economically no different from increased government spending. Indeed, a majority of the Obama “tax cuts” were “refundable” income tax credits, which involve sending a government check to people who do not even pay income taxes, economically indistinguishable from increased government spending. That is why even the federal government’s own official beancounters account for such refundable credits in the federal budget as spending rather than tax cuts. Such tax credits do not have the incentive effects of rate cuts explained above.

Some critics falsely argue that Reagan increased payroll taxes which are paid much more by lower and moderate income workers. The payroll tax rate increases of the 1980s were adopted under President Carter and the Democratic Congress in 1977. The Greenspan Commission Social Security rescue plan adopted in 1983 only advanced a couple of these already scheduled payroll tax rate increases by a year or two.

 

[Real Korimyr #9]

The difference between Reagan's economy and Obama's economy is that our credit could sustain massive deficits in Reagan's era. President Obama does not have the same luxury.

 

[Scanner]

interesting read.

Reaganomics Vs. Obamanomics: Fallacies Offered By The Left - Peter Ferrara - On The Cutting Edge - Forbes

Reagan's tax cutting brought on the 1991 recession - a severe one.

So now that you have raised the banner of trickle down economics (which we all know is nonsense), please tell us why we shouldn't restore taxes on the non-business owner rich to normal levels (70 - 94%), as they have been since World War I (when Republicans concede that we need money badly enough to cut spending on lots of necessary services).

 

[imagep]

Reagan's tax cutting brought on the 1991 recession - a severe one.

So now that you have raised the banner of trickle down economics (which we all know is nonsense), please tell us why we shouldn't restore taxes on the non-business owner rich to normal levels (70 - 94%), as they have been since World War I (when Republicans concede that we need money badly enough to cut spending on lots of necessary services).

Because the wealthy generally feel "entitled", just like some of our poor do.

 

[The Baron]

Here's the difference in a nutshell:

After four years, Reagan asked America are you better-off than you were four years ago and the American people responded by re-electing him in the biggest land-slide in American history.

Currently, Obama stands to lose in one of the greatest land-slides in our country's history if anybody asks the same question.

 

[hazlnut]

Great thing about the internet, you can always get both sides...

The Myth Of Reaganomics

Government Spending

In 1980, the last year of Jimmy Carter's administration, the fed eral government spent $591 billion. In 1986, the federal government spent $990 billion, an increase of 68%. Federal spending as percent of GNP in 1980 was 21.6%, and after six years of Reagan, 24.3%. A better comparison would be percentage of federal spending to net private product, that is, production of the private sector. That percentage was 31.1% in 1980, and a shocking 34.3% in 1986. So whether in absolute terms or in percentages, the Reagan administration has brought us a substantial increase in government spending.

Reagan increased spending. And percentage of Gov spending to GDP went... wait for it, wait for it... UP!!

Taxes

Despite the much touted tax cuts of 1981, taxes for the average person actually rose, and they rose every year thereafter. Of course, they weren't called "tax increases," they were called "fees" or "plugging loopholes; but the effect was the same. The facts are that federal tax receipts were $517 billion in the last Carter year of 1980. In 1986, revenues totaled $769 billion, an increase of 49%. Taxes fell from 18.9% of the GNP to 18.3%, or for a better gauge, taxes as percentage of net private product fell from 27.2% to 26.6%. While that is a slight decrease, it hardly matches the overheated rhetoric. What actually went down was not tax cuts, but tax shifting, from upper income taxpayers, to middle and lower-income taxpayers. This was accomplished through an $165B increase in Social Security taxes, monies which were spent as ordinary revenue. Taxes were increased again in 1986, to prevent a market meltdown.

Tax shifting... in other words, redistribution of wealth...downward.

 

[Redress]

We have two good examples of why using editorials to prove anything is a bad idea in this thread. Spin and selective choices of data are both bad ideas for a rational discussion.

 

[Geo Patric]

interesting read.

These are the reasons why the dramatic reductions in tax rates under President Reagan were the central factor in creating the dramatic turnaround in the economy that grew into the astounding, historic, 25-year Reagan boom, though the change in monetary policy was critical as well
[/quote]

Fact? Well, sorta…

Soaring returns on the stock market generated unprecedented opportunities for savvy investors to attain great wealth. In 1980, just 4,400 American taxpayers had claimed an annual income of more than $1 million. By 1987, more than 35,000 did—a stunning eightfold increase

But….

the economic outlook for middle- and working-class families who depended on wages for their incomes was somewhat better than it had been during the bleak 1970s, but still significantly worse than it had been during the 1950s and '60s.

During Ronald Reagan's presidency, the wealthiest one-fifth of American households (those who naturally owned the most stock) saw their incomes increase by 14%. Meanwhile, the poorest one-fifth (who presumably owned no stock) endured an income decline of 24%

MMPH!

Not so good for everybody… most people, those in the middle actually saw little or no change at all…

Any other qualifiers?

Well, what di dhe leave behind? Well, TAX CUTS right? Well, again, sorta, kinda. In fact, the amount of revenue taken in (and remember THAT is what taxes are really for) remained unchanged. The difference was in WHO was paying:

Reagan's tax policies did, however, redistribute the tax burden significantly, even if they failed to reduce it overall. By cutting income taxes, which are paid at a higher rate by the wealthy, while increasing payroll taxes, which are paid at a higher rate by the working poor and middle class, Reagan shifted the tax burden down the income scale downward.

Rich pay less, middle and poor pay more. But.. he cut GUMMINT spending, dinnt he?

Nope, gummint got BIGGER and spending increased.

Debt? from $997 billion to $2.85 trill

Forbes… yeah… sure… good years for the economic elite not for the rest of us, though.

Geo.

 

[Deuce]

Even Reagan did not practice Reaganomics, so we don't really have anything to go on, now do we?

 

[Graffias]