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Here is a very interesting article detailing the taxation and spending record of the Reagan years.
Note that this is a LIBERTARIAN source.
Even Ford and Carter did a better job at cutting government. Their combined presidential terms account for an increase of 1.4%—compared with Reagan's 3%—in the government's take of "national income." And in nominal terms, there has been a 60% increase in government spending, thanks mainly to Reagan's requested budgets, which were only marginally smaller than the spending Congress voted.
...
Reagan came into office proposing to cut personal income and business taxes. The Economic Recovery Act was supposed to reduce revenues by $749 billion over five years. But this was quickly reversed with the Tax Equity and Fiscal Responsibility Act of 1982. TEFRA—the largest tax increase in American history—was designed to raise $214.1 billion over five years, and took back many of the business tax savings enacted the year before. It also imposed withholding on interest and dividends, a provision later repealed over the president's objection.
But this was just the beginning. In 1982 Reagan supported a five-cent-per-gallon gasoline tax and higher taxes on the trucking industry. Total increase: $5.5 billion a year. In 1983, on the recommendation of his Spcial Security Commission— chaired by the man he later made Fed chairman, Alan Green-span—Reagan called for, and received, Social Security tax increases of $165 billion over seven years. A year later came Reagan's Deficit Reduction Act to raise $50 billion.
Even the heralded Tax Reform Act of 1986 is more deception than substance. It shifted $120 billion over five years from visible personal income taxes to hidden business taxes. It lowered the rates, but it also repealed or reduced many deductions.
As I said - Reagan spent and spent and spent - and the result was a BOOMING economy.
But somehow the GOP just glosses over all that spending and pretends it never happened.
Despite elaborate and expensive programs, and despite pumping nearly $4 trillion into the economy over the past 2 years, the recession and subsequent "recovery" looks no different from those of the past. In fact, the current recovery is incredibly weak when we take into account just how severe the recession was. Following the early 80s recession (the last "big one"), growth was above average (>3%) for 39 months. For 18 months growth was double and triple the average rate, reaching as high as 9.3% at one point, and in the 7% and 8% ranges throughout 1983 and part of 1984. At one point the economy added 1.1 million jobs in a single month, which was phenomenal 30 years ago.
That being said, we have pretty much created ballooning deficits and added a significant amount to the debt with nothing to show for it. We still have below average growth, persistent unemployment, and a stagnant housing market.
Tomorrow is the next GDP release, so we will have to wait and see if anything changes.. The unemployment rate will never come down if growth continues to be below average.
This is a very fair assessment, with the exception of your bolded portion. Those job gains came from an industry taking off (computers), not from a single politician or political ideology. The government (both parties) and get credit for giving computers a chance to launch, and commerce for launching. We the people agreed and we the people got the reward on our collective investment. It's great when we have win win deals.
We're seeing a positive direction that can't rebound as quickly as anyone wants because sorting out a million car pile up with a bulldozer yields more loss than gains. We also cannot make meaningful gains (investor confidence) until the structures that caused this mess are corrected & regulated. Arguing against regulation at this point is throwing in with those who mean to see America fail. Excess regulation is known quantity to be harmful. Protecting our interests comes first, not second to the whims of commerce wanting a lollipop.
HMMM wonder what will happen when the prop {stimulas} is spent? Will it be like the housing prop {homeowners tax credit} when ended sales dropped like a rock? What will happen to the states when there is no prop to pay their employess? If the stimulas is such a success and the economy is better why are some in the Obama administration seeking another 200 billion?
There is a huge difference from the 80s and 90s when the private sector was gassing the economy compared to today where most of the gas is coming from borrowed money from our broke A$$ gvt.There is also a different attitude where before we were looking for the private sector to create jobs and now we are looking to elected gvt officials.
We would be better off if the private sector was leading the charge but with them sitting on $1 trillion they are on the sidelines.
no--- bush and obama delayed another depression.
its not over. since neither of them addressed the underlying issues causes the economic slowdown, the slowdown will continue accompanied by massive increasing debt. the elephant is still standing squarely in the living room.
The recovery back in those days was fueled by the mid-80s housing boom and enormous growth in so called "white collar" jobs in the financial and business service sector.
You do not want to believe that the mortgage crisis we have recently had already occurred on a micro scale in the 80's. Wildly over inflated valuations, fast and loose regulations, government happy as clams for increased revenues offering the shallow appearance of being a hero but they were aiding and abetting the displacement of middle class families out of their homes. Astronomical cost of living increases to pad those speculators while gov't held it's foot on the brake for wages.
Could you reference to that quotation because on page 13, it clearly states that "Ford, which did not take government funds..."
Perhaps under normal business conditions that would bave been a valid argument but the colapse of GM and Chryler could have hardly been contained just to the two failing automakers. As the report spells out:
TARP also was instrumental in assuring the orderly bankruptcy of GM and Chrysler and supporting the entire motor vehicle industry. Without money from the TARP, these firms would have very likely ceased as going concerns. The liquidation of GM and Chrysler would have in turn caused the bankruptcy of many vehicle part suppliers and, as a result, Ford as well.
Without government help, the vehicle manufacturers’ Chapter 11 restructurings would have likely turned into Chapter 7 liquidations.
Their factories and other operations would have been shut down and their assets sold to pay creditors. The collapse in the financial system and resulting credit crunch made financing the companies while they were in the bankruptcy process all but impossible. Debtor-in-possession (DIP) financing is critical to pay suppliers, finance inventories, and meet payroll while companies restructure. It is risky even in good times, so DIP lenders become senior creditors when a bankruptcy court distributes a firm’s assets and can charge high rates and fees for their risks. Yet in the credit crunch that prevailed in early 2009, it is unlikely that DIP lenders would have taken such risks. Money from the TARP was necessary to fill this void.
Page 13. End-of-Great Recession.
Like who? And with what? And how long? Or is this simply wishful thinking?
Post number 9 on this thread said all 3.
Why would suppliers for Ford gone out of business? If Ford is selling cars then the suppliers will produce the parts.
TARP assured the 'orderly" bankruptcy of GM and Chrysler. LOLS. Are backrupticies normally "disorderly? LOLs. Maybe we should reform bankruptcy courts to make them orderly.
And had GM and Chrysler gone out of business who would have filled that need? Ford and other automakers would have filled the demand.
And there would be hundreds of engineers and thousands of other workers in SouthEast Michigan out of work. Is it inconceivable that some of them could have got together and started some auto comapnies? I'm sure plenty of them would be competent enough to be successful. And they could get machinery and buildings cheap.
Saying Ford would have gone under had GM and Chrysler gone bankrupt proves that whoever wrote this article knows nothing of economics.
GM and Chrysler going out would have created new customers for Ford.
Burger Chef went out of business years ago. Did that hurt or help McDonalds? Did suppliers for both Burger Chef and McDonalds go out of business? There are literally thousands of examples like that. Are KMart struggles hurting or helping Wal-Mart? The auto industry is no different. The same laws of economics that effects every other industry effects the auto industry. They aint special.
I worked for a company a few years ago that jumped from 50 employees to over 200 in less than a year. Increased sales from 10 million a year to over 40. Why? Our main competitor went out of business and we were able to get a big chunk of their business. It happens all the time.
Ford would have had LESS competition. As long as that company isn't run by morons they would have GAINED market share with less competition.
Why would suppliers for Ford gone out of business? If Ford is selling cars then the suppliers will produce the parts.
Ford's part suppliers are the very same parts suppliers for GM, Chrysler, Toyota, Nissan and Honda. Even as bankrupt as GM and Chrylser were they represented more than 30% of the domestic market, do you think that in a period of declining demand that suppliers could withstand even a short term 30% reduction in business, most industry analyst didn't think so.
"TARP assured the 'orderly" bankruptcy of GM and Chrysler. LOLS. Are backrupticies normally "disorderly? LOLs. Maybe we should reform bankruptcy courts to make them orderly."
I don't think that you comprehend the implications of a orderly of Chapter 11 bankrupcy and the disorderliness of Chapter 7. Under Chapter 11 bankrupcy a business has some protections which allow it, under court supervision to restructure its debt, obtain new capitalizations and move on. Under Chapter 7, the buisness simply shuts its doors leaving stake holders and creditors to pick over the corpse a mere fractions of the remain asset value.
"Ford and other automakers would have filled the demand."
And where does this demand come from when you set off a chain of events that leaves the supply chain in tatters, hundred of thousands of more workers out on the streets and the ripple affect that would cause throughout the economy? Your argument would be sound policy in a period of economic growth but it makes no sense in a deflationary economy.
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And there would be hundreds of engineers and thousands of other workers in SouthEast Michigan out of work. Is it inconceivable that some of them could have got together and started some auto comapnies?
With what? This was a crisis of the finacial sector, credit evaporated where was would the billions of dollars have come from to start up a new auto complany that would not only provide the capital finances but the money to sustain a car company that would take years to push their first car off the factory floor and we haven't even begun to talk about the development of a dealer net work to sell them.
Quote:
I'm sure plenty of them would be competent enough to be successful. And they could get machinery and buildings cheap.
I think that I answered the financial issue above, but let me add another component. One of GM's problems with maintaing profitability is the fact that much of the cheap machinery would be cheap for the simple fact that it was outmoded to begin with.
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Saying Ford would have gone under had GM and Chrysler gone bankrupt proves that whoever wrote this article knows nothing of economics.
Alan Blinder, Professor of Economic at Princeton Univeristy and Mark Zandi chief economist for Moody's Analytics, with a Phd in economics from the University of Pennsylnvaina, and who studied under Nobel economist Lawrence Klein don't know anything about economics... astounding.
"GM and Chrysler going out would have created new customers for Ford."
In the face of aggregate decline...
Quote:
Burger Chef went out of business years ago.
Burger Chef or Burger King? Burger Chef was purchased by Imasco and were rebranded as Hardees. Burger King sought protection under Chapter 11, which like GM and Chrysler allowed it to restructure which is why there is a Burger King a couple of miles from my home.
What were you saying about Blinder and Zandi again?
Quote:
I worked for a company a few years ago that jumped from 50 employees to over 200 in less than a year. Increased sales from 10 million a year to over 40. Why? Our main competitor went out of business and we were able to get a big chunk of their business. It happens all the time.
I'm sitting here arguing with a person who thinks there is some sort of correlation between a business of 200 employees and one that has that many in a single dealership....
I'm done for the night. Maybe we can pick this up tomorrow.
Why would suppliers for Ford gone out of business? If Ford is selling cars then the suppliers will produce the parts.
TARP assured the 'orderly" bankruptcy of GM and Chrysler. LOLS. Are backrupticies normally "disorderly? LOLs. Maybe we should reform bankruptcy courts to make them orderly.
And had GM and Chrysler gone out of business who would have filled that need? Ford and other automakers would have filled the demand.
And there would be hundreds of engineers and thousands of other workers in SouthEast Michigan out of work. Is it inconceivable that some of them could have got together and started some auto comapnies? I'm sure plenty of them would be competent enough to be successful. And they could get machinery and buildings cheap.
Saying Ford would have gone under had GM and Chrysler gone bankrupt proves that whoever wrote this article knows nothing of economics.
GM and Chrysler going out would have created new customers for Ford.
Burger Chef went out of business years ago. Did that hurt or help McDonalds? Did suppliers for both Burger Chef and McDonalds go out of business? There are literally thousands of examples like that. Are KMart struggles hurting or helping Wal-Mart? The auto industry is no different. The same laws of economics that effects every other industry effects the auto industry. They aint special.
I worked for a company a few years ago that jumped from 50 employees to over 200 in less than a year. Increased sales from 10 million a year to over 40. Why? Our main competitor went out of business and we were able to get a big chunk of their business. It happens all the time.
Ford would have had LESS competition. As long as that company isn't run by morons they would have GAINED market share with less competition.
All of that sounds fine in THEORY.
In reality it very DIFFERENT.
Point #1: You make the claim that FORD would have recieved the lost business. That's a silly and ignorant assumption. It might well have gone to Toyota, Honda, Suzuki, Hyundai, Kia or any of the multitude of OTHER companies that build vehicles overseas. There is absolutely NO BASIS to assume FORD would pick up all - or even MOST - of the slack. The fact is, those jobs would likely migrate to factories overseas somewhere.
Point #2: You make the claim that someone else would start a new car company to hire all those workers. With WHAT? It costs MONEY to start a new company - especially something as complex as a car manufacturing business. The banks were not making LOANS - especially not to a risky startup in the midst of a major recession. Selling the factories etc to an existing company is one thing (and there were NO takers (GM later TRIED to sell Saturn)), trying to start a brand new company up from scratch is RISKY and EXPENSIVE. No way in Hell was that going to happen. All those workers would simply lose their jobs - which would addit the government outlay anyway as those folks are forced onto unemployment (possibly for YEARS)
Point #3: It's not JUST the GM and Chrysler that would have lost jobs. Those suppliers you mention would have lost jobs too since FORD is NOT going to pick up all the slack (as I've already mentioned) - and the auto companies that DO pick up the slack have their OWN suppliers (many - probably MOST - of them OVERSEAS).
Point #4: Besides the suppliers, LOTS of other AMERICANS would have lost their jobs as the laid off workers QUIT SPENDING. This included waitresses, salespeople, cooks, etc, etc, etc. It's called the ripple effect and the rule of thumb is that for each and every manufacturing job lost or gained 3 to 4 additional jobs are lost or gained. That's a LOT of AMERICANS that would lose their jobs - all of whom would then be on unemployment.
The WHOLE IDEA that the marketplace is going to always act rationally is silly. During a financial crises such as this people act EMOTIONALLY because they are AFRAID - that's why such crises used to be referred to as PANICS.
Plenty of other problems with your "logic" - but that's enough for now.
Ken
Last edited by LordBalfor; 07-29-2010 at 09:50 PM..
The stimulus has done what it was supposed to do: end the Great Recession and spur recovery. We do not believe it a coincidence that the turnaround from recession to recovery occurred last summer, just as the ARRA was providing its maximum economic benefit.
Uhhhhh..... Just how much of that stimulus had even been spent yet last summer... the time they are crediting the recovery to have occurred?
Uhhhhh..... Just how much of that stimulus had even been spent yet last summer... the time they are crediting the recovery to have occurred?
Enough to PREVENT a total collapse.
Ken
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