REAGENOMICS VS OBAMANOMICS- Reagan inherited a steep recession but, unlike President Obama today, did not keep using it as an excuse well into his presidency. Reagan didnt need excuses, because his policies began to produce results very quickly. Reagan had pushed for a 30 percent across-the-board cut in marginal income tax rates, but Democrats in Congress forced a reduction to 25 percent and delayed its implementation. Once the bill passed and kicked in, the results were dramatic. Along with Reagans policy of deregulation, his tax cuts produced an economic boom that continued for almost eight full years — from November 1982 to July 1990 — with not a scintilla of a recessION. Reagans policies led to the largest period of economic growth to date in the history of the nation. The economy was nearly a third larger at the conclusion of the Reagan years than at the beginning. Real median family income grew by $4,000, as opposed to almost no growth during the Ford-Carter years. Like President John F. Kennedy, Reagan demonstrated that reducing marginal income tax rates could increase revenues. Revenues almost doubled during the Reagan years, and even after adjusting for inflation, they increased by some 28 percent. Reaganomics also shattered the long-established economic textbook axiom that there is a trade-off between unemployment and inflation. Despite nearly 20 million new jobs, there was barely any upward pressure on prices. Though Democrats preached that under Reagan, the rich got richer and the poor got poorer — in fact the plight of all income groups improved. Not only that but upward mobility, which received its last rites under Carter, made a dramatic comeback, as a Treasury Department study revealed that 86 percent of the people in the lowest 20 percent of income in 1979 graduated into higher categories during the 1980s. More people in every income group moved up than down except — ironically — the top 1 percent of earners. Moreover, the real Reagan record puts the lie to the liberal mantra that the rich didnt pay their fair share. In the first place, average effective income tax rates were cut more for lower-income groups than for higher-income groups. In 1991, after the Reagan cuts had been in place for almost a decade, the top 1 percent of income earners paid 25 percent of income taxes; the top 5 percent paid 43 percent; and the bottom half paid only 5 percent. How is that for fairness?
Posted on: Thu, 08 Jan 2015 07:04:49 +0000
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