Help me with this one: "Reagan got us out of the last recession...

[Beavker]

...with the Cut Taxes policy. Obama says that just cutting taxes alone won't do it, but Reagan did it and didn't have a bunch of extra Billion dollar crap to do it."

Says a close minded, I'm always right Republican in my work area (as they all are). I was a bit young to know exactly what went on exactly, nor have I read to any extent what Reagan did or didn't do, other than I have the gist of his Trickle Down Reaganomics and Supply side economics (thanks Larry Kudlow, not).

I'd love some thoughts on that from you guys.
Thanks

[WannaJumpMyScooter]

1. uh, there have been 2 recessions since

Reagan was president, both under bushes

or has this asshat been asleep for the past 25 years?

and Reagan got us into the recession, but it beat the inflation, I guess

[tritsofme]

3. I'd give more credit to Paul Volcker than Reagan

for draining the inflation out of our economy.

[JVS]

17. Volker caused the recession by raising interest rates, which also nipped the inflation.

As far as I know this was done at the behest of Reagan and his fellow assholes.

[WoodrowFan]

20. it started before

Volker started his policies under President Carter, but continued them under Reagan.

[n2doc]

2. He raised taxes in 82. We didn't come out of the recession until 84.

And the real reson for the ending of the recession was the easing in fed rates after they shut down the inflationary spiral of the late 70's. Going from 12% to 6 percent rates does have an effect...

[JDPriestly]

16. And, as Paul Krugman pointed out some time ago, we can't lower

interest rates because they are already as low as they can go -- short of 0%.

[Drunken Irishman]

4. There was an official recession the year Reagan became president.

It lasted two years, however, his tax-cutting policies led to another recession in the early 90s.

The recession, though, was brought on by the 1979 energy crisis and tight monetary policies to help control inflation. But once the oil market was stabilized internationally, which was probably the greatest impact on ending the recession (not the tax-cuts), America's economy entered out of the recession and pretty much stayed there until around 1990, which would have been impacted by the last few years of Reagan's second term.

[Tangerine LaBamba]

5. If it worked so well,

how come our economic picture is so bleak today?

Reagan managed to convince dimwits like your GOPig friend that he could pull of huge increases in defense spending while lowering taxes. Of course, he only managed one, and the sorry results of that are still plaguing us.

Anyone look at the defense budget lately? And how it's being spent?

Yeah, Raygun's "trickle-down" theories worked really well. Even his whipping boy, David Stockman, finally conceded that they were all crap, just like Raygun.

It's mind-boggling to realize that there are still people like your friend out there, believing that so-often-disproved nonsense. How stupid are they, really?

[RedEarth]

6. Watch part 1 and 2 of Krugman interview

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=385x268971

[scheming daemons]

7. Reagan raised taxes in '82. Recession ended in '83.

In any case, Volcker CAUSED the recession intentionally, to slow down inflation.

[pdxmom]

8. Here you go:

"It's conservative lore that Reagan the icon cut taxes, while George H.W. Bush the renegade raised them. As Stockman recalls, "No one was authorized to talk about tax increases on Ronald Reagan's watch, no matter what kind of tax, no matter how justified it was." Yet raising taxes is exactly what Reagan did. He did not always instigate those hikes or agree to them willingly--but he signed off on them. One year after his massive tax cut, Reagan agreed to a tax increase to reduce the deficit that restored fully one-third of the previous year's reduction. (In a bizarre bit of self-deception, Reagan, who never came to terms with this episode of ideological apostasy, persuaded himself that the three-year, $100 billion tax hike--the largest since World War II--was actually "tax reform" that closed loopholes in his earlier cut and therefore didn't count as raising taxes.)

Faced with looming deficits, Reagan raised taxes again in 1983 with a gasoline tax and once more in 1984, this time by $50 billion over three years, mainly through closing tax loopholes for business. Despite the fact that such increases were anathema to conservatives--and probably cost Reagan's successor, George H.W. Bush, reelection--Reagan raised taxes a grand total of four times just between 1982-84. "

http://www.washingtonmonthly.com/features/2001/0301.green.html

Read the whole article. You'll find some other interesting economic myths about Reagan that will make your co-worker cry.

[Joanne98]

9. There was a recession in 1982. He caused that one. Carter got stuck with

the 1974 recession that was caused by the Vietnam war. When Reagan cut taxes the big corporations took the extra money and shut down little factories and business all over the country. (hostile takeovers) They didn't want them, they just locked the gates and let them rot. It put millions of Americans out of work for no reason. Corporate raiders and Merger madness.

The country never recovered from that. It split the economy in two. Main street and Wall street. What's good for Wall Street is bad for Main Street. Anyway...

Arguing with Republicans is a waste of breath. They are stupid.

[Beavker]

10. Nice work!

Wish you all could have been here to ram it down his throat. Although with this guy, it would not have mattered. He's never wrong. He is just never wrong.

Thanks!

[Davis_X_Machina]

11. Military Keynsianism

The tax cuts were irrelevant -- the ramp-up in defense spending was the key. I remember machinists being fought over by defense contractors, signing bonuses to code-monkeys, all that demand manufactured from whole cloth by the DoD and DoE.

[Beavker]

13. So...there was still massive "spending" stimulus as well.

So the Tax Cuts were to appease his constituency, then they rammed through a bunch of spending. Granted the military may need it, but it was spending, and it was stimulus. Just depends on who you give it to I guess. I guess you and I aren't worthy of help.

More good stuff. Thanks DU'ers.

[dkofos]

12. You should have been listening to Hartmann this morning.

He went over this very subject.

He did cut taxes in 81, followed by a recession and bubble in 82.
Followed by a tax increase in 83 (FICA), 85, 86,87, all on low to middle income people.

Listen for yourself @ http://www.thomhartmann.com/

[Beavker]

14. Thanks!

I'm new to a lot of this and I'm learning this guy is someone I need to listen to. Thanks!

[Beavker]

21. I'll have to listen to the archives I guess or on the web

I think it's illegal to listen to him in Nebraska. Like Dancing, in Footloose. ;)

[JDPriestly]

15. Easy -- Reagan raised taxes -- especially payroll taxes.

Reagan reduced taxes on the very rich, but raised them on most Americans.

[SergeyDovlatov]

18. Reagan let Paul Volcker to continue policy of austerity ...

that stopped the inflation and bringing the inflation down did help the economy to recover.
I can give Reagan credit for that. Though Reagan inherited Paul Volcker from Carter.

[liberal N proud]

19. Reagan got us into a recession and the reaganomics caused this mess

I had one year during the reagan years where I made less than $700. Don't let anyone tell you Reagan was a great president. He was nothing more than an actor and could act his way out of just about anything.

[dbonds]

22. Reagan raised taxes.

The cutting taxes meme is part of the myth. Also, the recession got worse for his first 2 years. And homelessness skyrocketed under Reagan

[Democrats_win]

23. Wikipedia has a very nice discussion of Reaganomics.

http://en.wikipedia.org/wiki/Reaganomics

Check out his record, I don't think it's that great:

"During Reagan's tenure, income tax rates of the top personal tax bracket dropped from 70% to 28% in 7 years, while payroll taxes increased as well as the effective tax rates on the lower two income quintiles. Real Gross Domestic Product (GDP) growth recovered strongly after the 1982 recession and grew during Reagan's remaining years in office at an annual rate of 3.4% per year, slightly lower than the post-World War II average of 3.6%. Unemployment peaked at over 10.7% percent in 1982 then dropped during the rest of Reagan's terms, and inflation significantly decreased. A net job increase of about 16 million also occurred (about the rate of population growth)."

[Beavker]

25. Wiki has similar not so great definiations of Supply Side Economics

which Reagan embraced. Larry Kudlow can't stop raving about it, undoubtably because he stands to make/keep more of his money as an invdividual as well as his Self Employed status as a consultant. Shamefully and unabashedly pushes this daily.

[The Traveler]

24. The stagflation cycle broke during Reagan's regime

Stagflation was nasty. High inflation, low economic expansion. You'd get a big raise and three months later you couldn't tell. Make no mistake about it, stagflation was bad. But everyone I know concedes deflation is even worse.

Stagflation was triggered largely by government way, way overspending ... escalation of the Viet Nam war, massive expansion of social programs ... an attempt to have big guns and big butter at the same time. This starts with Johnson. Nixon's ecomomic policies and continued expansion of war and defense spending kinda sealed that deal. Jimmy Carter did a lot to clean up the mess.

The Reagan recession of 82 was a side effect of the cure. And, if I recall correctly, it is under Reagan we become an actual debtor nation for the first time. While I think we have to give Reagan some credit for continuing the effort to break stagflation, we can take a lot of issue how he achieved that and what he did afterwards.

But recession or deflation is a different thing than 70's style stagflation. Trying a Reaganomics style solution (which one could argue kinda worked against stagflation) on this problem seems certain to bring economic disaster to us all.

Trav