Bad economy???

[BuzzH]

Danr,

Wrong, 12 years is a long time to wait for the economy to come around.

Please explain a reason why an economic plan should take 12-20 years to work?

Again, Reagan was an excellent liar, he claimed the results would be immediate. Just like Dubya did with the tax cuts.

By the way, I dont have the "I want it now" mentality. I just dont fall for political BS and lies.

Also, what a great contradiction you just made...it takes 12 years for Reaganomics to work, but at the same time "stupidity screwed it up in a few"...

Doesnt make sense, if economic plans (generally) take twelve years to work, must take another twelve to change them or "screw" them up again.

Really, we should just now be seeing what Clinton did to the economy...right? Its been twelve years since he took office. The next 4-8 years will reveal what Clinton did, according to you.

Surely Bush's tax cuts wont be felt for another 8 years at least...we have to be patiant, to see what Dubya did for the economy.

 

[ELKCHSR]

It is just such a tangled web...
I would say that some things are seen and noticed pretty quick, others do take a long time. It takes buisness for example, to get the permits to put up the building. In Washington where I was raised, this could take 2-6 years alone. Then the buildings go up and you get to start making product. There still has not been any profits made. You have to sell a ton of stuff, some times taking a number of years to actually see the results from the money expended. Then the buisness gets to start working on the profits from that endevour...This whole process could easily take up to 12 years to really get going.
The quick side is for example, every one getting a chunk of money back from the Government a year or so ago, they run out and immediatly spend it on consumable items. That was billions put right back into the economy and buisness immediatly...
There is a lot to it, and one could sit and compose volumes of if's, and's or buts about this topic. It is not a simple subject by any streach of the imagination.

 

[Tom]

Reagonomics:"His policies resulted in the largest peacetime economic boom in American history and nearly 35 million more jobs." from that study above.

 

[BuzzH]

SUPPLY SIDE ECONOMICS: IS IT FOR REAL?



By Edward Lawrence, Citizens for Responsible Government



Supply side economics is the theory that certain types of tax cuts cause economic growth. Tax cuts benefiting businesses and the wealthy, the theory goes, allow entrepreneurs to invest their tax savings, which creates higher productivity, jobs, and profits. This growth, say the supply-siders, allows the entrepreneur and the new workers to pay more taxes, even at lower rates.



Supply-siders point to two items to prove the validity of this theory: the claim that it worked in the Reagan Administration, and the fact that Harvard University Professor Martin Feldstein says it is true.



It was the theory of supply side economics that encouraged George W. Bush to propose a $1.4 trillion tax cut in 2001 and a $695 billion tax cut in 2003 (subsequently cut to $350 billion by the Senate). And this in spite of a $6.4 trillion national debt, an unfunded war, and deficits “as for as the eye can see.”



What is astounding is that Congress passed the tax cuts, and many people in business and the media endorsed them, in spite of the fact that there is no evidence of validity to the supply site theories.



Those who claim the Reagan tax cuts caused an increase in economic growth generally measure the economy from the depths of the recession in 1982 through to the next business cycle peak in 1989, concluding that the economy grew at an average annual rate of 3.8 percent. Showing that the economy recovered from the recession (as it does in every swing of the business cycle) says nothing about whether the 1981 income tax cuts caused the underlying growth rate to be greater than it would otherwise have been.



Looking at the business cycles from one peak to the next, rather than from the trough to the peak, reveals that growth rates were unaffected by the Reagan supply side tax cuts. As one writer put it: Reagan didn’t create a “supply-side boom”; he sat in the Oval Office during a “business-cycle boom.”



Two other factors contributed to the 1982 to 1989 economic growth: the 400% increase in oil prices in the early seventies, followed by a 125% increase in 1978-81. Oil prices happened to come down to normal about the time of the tax cuts; the reduction in oil prices helped the economy a lot. The cut in taxes may have temporarily helped only a little.




Supply side, or “trickle-down” economics, is nothing but a ploy to reduce the tax burden on the very wealthy, and thereby increase the tax burden on everyone else – especially future generations who will have to pay interest on the money borrowed to fund these tax cuts.

 

[BuzzH]

Tom,

From your article...

. From 1973 to 1982, it averaged only 1.6 percent. The Reagan economic boom restored the more usual growth rate as the economy averaged 3.5 percent in real growth from the beginning of 1983 to the end of 1990.

Read above for the oldest trick in the Supply Side Economics text book: "How to tweak the numbers"...

 

[Nemont]

The challenge that the believers in Supply Side Economics have is that there hasn't been a reduction in spending to go along with a reduction in Tax increases. Ronald Reagan cut taxes and had a $40 Billion dollar decrease in the federal budget. He then went on the largest peace time military build up in our history.
So the money supply and economic growth both grew. We got out of the Stagflation of the 1970's but did it by borrowing massive amounts of money to finance our budget deficits during Reagan's term in office.

Billions of dollars that Reagan pumped into the economy by borrowing also helped spur growth in the economy. So to say it was simply supply side economoy doing is actually incorrect.

I am not arguing that the build up was not justified and in the end the collapse of the Soviet Union was worth it.

Supply side coupled with fiscal conservatism may work but it has never been tried. President George W. Bush, just like Ronald Reagan before him, did not want to take the political heat for reducing spending.

Granted we are fighting a war on terrorism and the economy slowed down in the wake of 9/11. What bothers me is the new spending, medicare Rx card etc. that runs counter to the supply side theories.

Nemont

 

[pawclaws]

"If Clinton cant take credit for the HUGE economic gains made during his entire administration, Bush shouldnt be allowed to take any credit for this little "bump" on the economic map. I've read countless posts on here about how the president has no power and limited control over the economy." H. Buzz

Huge economic gains???? Back to school there Buzz; Raising taxes to increase income and firing half the government to reduce spending, then refinancing the debt at lower interest to extend its lifespan does not equate to economic gains there bubba. Merely moves the burden of "pony up" down the line. And you are correct; neither Clinton nor Bush may take credit for changes in the economy.

 

[Nut]

How is the current deficeit going to be financed?

 

[JoseCuervo]

Originally posted by Nut:
How is the current deficeit going to be financed?

Sadly, by mortgaging the futures of Lil' Nut and TurkeyEye.....

 

[BuzzH]

But, hey, look at the bright side, at least we all got a few hundred dollar tax cut to show for that huge deficit Nuts kids are going to pay for...and Dubyas buddies made out even better.

Supply side economics 101.