[silver]

Originally posted by highlander
Thats because democrats wallow in self-pity worrying about every little detail of social reform at home, blinding the population to the real, larger problems of the world. As for the new deal? That was a DISASTER when it started, then WW2 came along and production was pushed up and economy started moving... the Cuban Missle Crisis wasn't caused by a republican, it was caused by the Cold War, and Russia realizing it could use Cuba to F*** with the US... As for reagan destroying the economy, do you have any idea what the misery index is, and what it was before reagan was elected? Misery index is unemployment+rate of inflation... it was running 20-25% before Reagan... the stock market grew more than 70% during his tenure in office. Sure he ran a deficit, but he had to keep the economy moving foward instead of stagnating, which it was doing before he came into office.

Many advocates argue that Reagan "proved that when you reduce taxes, you spur the economy...." Yet that supply-side credo is simplistic. Mainstream economists can show you in detail why Reagan's 1981 tax cuts had little or no effect on the recovery of 1983-89. That recovery reflected lucky developments that had nothing to do with tax cuts.

For one thing, strong recoveries normally follow severe recessions. Reagan happened to come into office during a bad recession; naturally, it ended. His timing was great, not his tax policy. For another thing, he lucked out with respect to oil prices. They skyrocketed in the 1970s, thanks to the OPEC cartel, and again in the early 1980s, thanks to Iraq attacking Iran. Few stresses hurt the economy like a spike in oil prices, and few things help like oil prices coming back to earth, as they did in Reagan's presidency - but not because of anything he did. Finally, Reagan lucked out with respect to Fed policies. A lot of the early-80s slowdown was caused by the double-digit interest rates that Fed Chairman Paul Volcker used to whip runaway inflation. But by the mid-80s the Fed had started to lower interest rates again. That made it easier for businesses to borrow, invest and create jobs.

So what did the tax cut contribute to the recovery? Not much. How do we know? Because if the Reagan recovery had been caused by a true supply-side surge of productivity, we would have seen productivity rates increase in the 1980s. They didn't.

How about people's claim that Reagan's tax cut actually "increased tax revenues"? Again, it doesn't hold up. A close look shows that what boosted Federal tax revenues during the 80's was not individual income taxes but payroll taxes - whose 4% average revenue growth resulted from a tax hike, the Social Security Reform Act of 1983. Besides, corporate tax revenues plummeted after Reagan's tax cut, and surged only after the 1986 tax-reform law raised corporate taxes again. Try explaining that with supply-side theory.

If you still believe the theory, remember what supply-siders predicted in 1993, when Clinton raised taxes on the wealthy by 40%. Newt Gingrich told us the tax increase was sure to bring on a severe recession. The Wall Street Journal told us the budget deficit would go through the ceiling. Forbes told us to take our money out of the stock market, because it was headed for a deadly crash.

The predictions couldn't have been more wrong, of course - but if supply-side economics were true, all these disasters are exactly what should have happened. See why mainstream economists consider supply-side theory a joke?

The real legacy of Reaganomics was a near-tripling of the budget deficit. Cleveland tries to pin the blame on Congress, but Congress added only 10% to Reagan's own budget proposals.

So do not tell me that he kept the market moving, it moved by itself, he just spent all the money.

As for the new deal do another history check, check the timeline and the economy between the years of 1929 and 1940.

I am not your average 21 year old. I am currently working on my masters for english literature, I have a minor in history and I am almost done with my bachelor of economics. I am not biased, I merely spout history.