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Recent Books I have Read and Recommend

  • "John Adams" by David McCollough
  • "Traitor to His Class" by H.W. Brands
  • "FDR" by Jean Edward Smith
  • "Truman" by David McCollough
  • "Thomas Jefferson Passionate Pilgrim" by Alf J. Mapp, Jr.

Friday, October 24, 2008

Reaganomics

I am astounded that here we are thirty-eight years after Ronald Reagan imbued his idealogical theory on this country and it's people and yet, we seem to have not learned from the economic lesson that has taken us to the brink of disaster. It has decimated the middle class, made corporations so powerful as to take away the rights of normal citizens, and made a very few of the wealthiest individuals rich beyond the dreams of avarice. I am referring, of course, to Reaganomics. The four pillars of Reagan's economic policy were to:

  1. reduce the growth of government spending,

  2. reduce marginal tax rates on income from labor and capital,

  3. reduce government regulation of the economy,

  4. control the money supply to reduce inflation.

    The problem is, it does not work in theory or in practice. In the news we here that this crises we are experiencing started a few months ago, but in truth the crises started thirty-eight years ago with the election of Ronald Wilson Reagan.

While Reagan was President, the top tax rates for individuals dropped from 70% to 28% in 7 years while payroll taxes increased for the lower and middle class workers. Also military spending got a huge increase and these scenarios combined to bring about large budget deficits. The policy was also called supply side economics or (trickle-down economics) because the rich got such a huge tax break they would invest more and the money would trickle down to the lower and middle class. This was a fatal flaw in the whole theory. The four pillars above all sound like good economic policy but the catalyst has to be the trickle-down part of the theory and in practice it does not happen.

Following Reagan we had four years of virtually the same policies under George Herbert Walker Bush. Then eight years of William Jefferson (Bill) Clinton. Clinton, a very moderate Democrat, brought some tax increases for the wealthiest 1% but not much and brought about the first of the free trade agreements that have taken jobs away from American workers by the thousands. Then came George Walker Bush and even more tax cuts for the wealthiest Americans. He began a systematic removal of all remaining regulations on the banking industry as well as on big corporations. He also put industry executives in key oversight positions so they would be much less effective in enforcing those regulations that still exist. Clinton had reduced the deficit and spending, but George W. Bush increased the deficit to double the amount it was under Clinton.

And now here we are today. The stock market is going up and down like a roller coaster, several large banks have collapsed, and people don't know if they will have a job tomorrow. It's pretty obvious to me that trickle-down economics and almost no regulations does not work and have brought us to the brink of another world-wide depression like the one we had in the 1930's. The middle and lower class have become serfs for the big corporations, the government is run by them through lobbyists and the government of by and for the people is in very great danger of becoming another failed state in the annuls of human history. It's time we did something about it, time to take control of our destiny and save the greatest nation the world has ever known. But, to do this, we need to get rid of Reaganomics once and for all.


3 comments:

Joseph M. Fasciana said...

It would be hard to disagree with data that you have pointed to, what is an enigma to me is why can't middle class republicans grasp the obvious effects that the right wing has had on this countries economy, I mean they aren't immune from this outright criminal blight. They pay 4 bucks at the pump. they pay more for heating and groceries, yet they stand firm and refuse to accept any facts that back up the fall of our economy. They somehow let it go over their heads and blame it on anything or person not related to their party. Just take a look at some of the negative comments I received from my last post, I mean its incredible, I don't mind getting negative feedback, but when it's hateful and just name calling, it just proves the point I was trying to make. One person went so far as to find by blog on another directory and give it a very unfair rating, that is how much vitriol these neo-fascist have. Well I will be checking in on your sight again, and thanks for your support.
I hope that if the dems win its a landslide with victories in both houses too.

Regards,

Joseph

"Hanging on a Hyphen" said...

this is a very intelligent blog. I knew it because I have trouble grasping the enormity of its ideas hahaha... Well, I was too young during the Reagan years but that's not excuse from being stupid. Guess what, I just read the news today and George Bush is telling the whole world to have patience and keep the faith in free enterprise... Echoes of the past? This blog is marvelously intelligent.

India said...

If we can just learn from the mistakes of the past...it's not too late. If middle class republicans would take their collective heads out of the sand and see what blindly following the party line is getting us we will all be a lot better off.

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