Reaganomics: Viable or not?

[★Bandiera Rossa☭]

This is a split from an off-topic discussion on this thread: http://www.twcenter.net/forums/showthread.php?t=393031

Here are some statistics
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Reagan very significantly increased public expenditure, primarily the Department of Defense, which rose (in constant 2000 dollars) from $267.1 billion in 1980 (4.9% of GDP and 22.7% of public expenditure) to $393.1 billion in 1988 (5.8% of GDP and 27.3% of public expenditure); most of those years military spending was about 6% of GDP, exceeding this numbers in 4 different years. All these numbers had not been seen since the end of U.S. involvement in the Vietnam War in 1973. In 1981, Reagan significantly reduced the maximum tax rate, which affected the very wealthy, and lowered the top marginal tax rate from 70% to 50%; in 1986 he further reduced the rate to 28%. As a result of all this, the budget deficit and federal debt increased considerably: debt grew from 33.3% of GDP in 1980 to 51.9% at the end of 1988 and the deficit increased from 2.7% in 1980 to more than double in 1983, when it reached 6%; in 1984, 1985 and 1986 it was around 5%. In order to cover new federal budget deficits, the United States borrowed heavily both domestically and abroad, raising the national debt from $700 billion to $3 trillion, and the United States moved from being the world's largest international creditor to the world's largest debtor nation. Reagan described the new debt as the "greatest disappointment" of his presidency.
The number of Americans below the poverty level increased from 29.272 million in 1980 to 31.745 in 1988, which means that, as a percentage of the total population, it remained almost stationary, from 12.95% in 1980 to 13% in 1988. The poverty level for people under the age of 18 increased from 11.543 million in 1980 (18.3% of all child population) to 12.455 (19.5%) in 1988. In addition, the situation of low income groups was affected by the reduction of social spending. Inequality also increased. The share of total income going to the 5% highest-income households grew from 16.5% in 1980 to 18.3% in 1988 and the share of the highest fifth increased from 44.1% to 46.3% in same years. In contrast, the share of total income of the lowest fifth fell from 4.2% in 1980 to 3.8% in 1988 and the second poorest fifth from 10.2% to 9.6

It is Wikipedia, but the citations are pretty reputable.

Discuss: Did/do Reagan's economic policies work, or not.

[xcorps]

http://www9.georgetown.edu/faculty/v...aganomics.html

[removeduser_4536284751384]

I think it was an effective policy.

Purchasing more from the economy than he was taking in taxes was a smart move because unlike the stimulus package, he wasn't just giving away money, he was spending it.

And we all know the terrible side effects introducing money into an economy can have, but he controlled that.

of course he did cut welfare.

[Thorn777]

Purchasing more from the economy than he was taking in taxes was a smart move because unlike the stimulus package, he wasn't just giving away money, he was spending it.
.

Huh what?

[chilon]

Purchasing more from the economy than he was taking in taxes was a smart move because unlike the stimulus package, he wasn't just giving away money, he was spending it.

Its voodoo economics

[ivan_the_terrible]

It is.

[Dr. Croccer]

Wishful thinking is what it was.

[pchalk]

i consider myself a conservative but Reaganomics seemed a little to risky on the spending side for me. im all for cutting taxes but u need to balance it out by cutting spending too otherwise u could end up with a debt that we have now.