No, no, no! “Running dogs” is a reference to revisionist Trotskyites. “Jackals” are the tools of the military industrial complex.
Kids these days. Sheeesh.
No, but it played a significant factor. The Reaganites followed a policy of tax-cut and spend. They slashed taxes on the rich, while increasing government spending through the Pentagon system. It was a great way to steal not only from the poor who were paying for all the useless military junk built, but also to steal from future generations. Somebody has to pay those bills, after all, and it ain’t gonna be the rich.
This is sort of off the subject, but I just returned from a visit to D.C. over Thanksgiving. What a surreal city! You land in Reagan National Airport, and see banners all over the place for the Washington Redskins. I mean, that really tells a lot about a country when the football team in the capital city is named after a racist slur, and the national airport is named after one of the most prolific terrorists of all time.
You don’t get out much, do you?
I thought running dogs were democrats, you know Running Dog Democrats !
I think there’s a pretty big difference between military spending and the money supply; the one is fiscal policy (how much tax revenue is spent in the budget), the other is monetary policy (how much money the Fed prints and the interest rates it sets, to help manipulate inflation and unemployment). In general, you can have an open fiscal policy but a tight monetary policy; the two are distinct mechanisms for the control of an economy. The reasoning would be that this specific policy combination would spark growth without much inflation. But it had the downside of massively increasing debt, especially considering that tax increases were anathema to Reaganites, but necessary to offset the military spending involved. Overall I think that (in very purely economic terms) the biggest failing of Reaganomics was an unwillingness to use monetary policy to help spark growth. If you’re careful about it, it can help out a lot.
Unrelated notes…
One big problem with Reaganomics, specifically the Laffer Curve, is that it is impossible to figure out where on the curve you are without changing the tax rate; even then, a change in tax revenues may be due to some completely extrinsic factor.
In part, Reaganomics, like most other economic ideologies, is theory–something that pares down variables as much as possible–applied to reality–something with a hell of a lot more variables than anyone ever realizes.
Ulterior
I don’t know. It seems we’ve just replace the commies with the muslim lunatics. This to me this worse for the simple fact, say what you will about them, at least the commies are sane to some degree.
Apples and oranges. The fall of the USSR didn’t trigger the rise of Islamic fascism. Actually, Islamic fascism in Afghanistan, 1980-1987, helped accelerate the fall of the USSR.
You always have enemies, but at least the Islamists don’t (yet) have thousands of nuclear warheads pointed at North America. The threat level has not reached that of the Cold War, nor do I expect it to.
Since I don’t think anyone else has actually ansewred you question with anything approaching both clarity and honesty at the same time, here goes. As simply as I can make it, Reagan did this:
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Cut taxes. And unlike CHumpsky’s assertions, this did help rich and poor alike. This leads to:
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Get more tax revenue. This worked pretty well. Reagan figured people wanted more incentive to work. And he figured, along with his advisors, that cutting negative incentive (taxes) was the equivelant of raising positive incentive (more money at the end of the day). He was right. It stimulated the economy and the government actually got more tax revenue.
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Outspend the USSR. Reagan had political goals which exceeded only making America rich. He despised Russian Communism. So he massively increased the miltary budget with new government cash, though he had to borrow to fill up everything he wanted.
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And the USSR fell. Partly from within, but the constant US presure, and the realization they simply could not ever keep up the pace and keep projecting any force abroad also required a system change. One of the proving grounds for this was Afganistan. The SovUnion realized it simply could not successfully project force with even a small US counter-force and local resistance.
The last two are not, strictly speaking, part of “Reaganomics”, but they all tie together. In the long run, it was more than worth it to destroy the “Evil Empire.” We did get a lasting debt, but it is still not bad compared to our total economic performance. It is a drain on the tax revenue now, though, from the debt service.
On the bright side, it made a lasting boost to the economy.
the formatting on ths graph may be all screwed up, but here goes. This is the potential government tax revenue. Each line makes up one “level” of taxation and the revenue the gov gets back.
_ (Here the tax is light, and people keep most all their $$. Gov gets very little)
_
_
____ (Here the gov gets its best revenue)
_
_
_ (Here the gov gets little revenue and the economy is bad.)
Formatting is bad. That’s supposed to for and arc.
Assuming you are referring to the 1986 tax cut - taxes for the poor (those making under $50,000) went down.
It was the middle class that got screwed. As usual.
The way I’m understanding this, the worst part about Reaganx was the deficit created. But aside from that, the good parts out weigh the bad it seems. The jobs, tax cuts (for rich and poor only, Neurotik?), and the long running economic boost. Are we still riding the economic wave that Reaganx brought us?
Well, I’d say that the direct effects of it have faded. Still, it is one factor that promoted the conditions which form our modern economy. I believe it is safe to say the current economy is much better than it would be had Reagan not come along.
In Economics, though, nothing is provable, I’m afraid.
I think we overestimate ourselves if we think that the USSR fell apart as a result of any American policies. The inherent inefficiencies of Communism and the lack of incentives for production created an economic and political system that could not be sustained forever. It fell of its own dead weight. I would give more credit to Gorbachev’s unwillingness to act like Stalin than I would to the Reagan arms build up.
One can certainly argue that cutting taxes stimulates the economy. It does not appear to be working for W. The question is whether it is responsible for us to pass a huge national debt to our children. Assuming happyheathen’s numbers are correct, and I believe they are, Reagan quadrupled the national debt. This is not responsible government. What Reagan promised was a free lunch. We ate it, and sent the check to our children.
Wow, a thread on Reaganomics, and I see not a single mention of the Laffer Curve, which was kind of integral to the idea of supply-side economics that Reagan pitched.
The Laffer Curve is essentially an application of common sense that dictates that there is some tax rate that maximizes tax revenue - that, basically, you can’t necessarily create more revenue by raising taxes. Contrary to what anti-Reaganites will have you believe, no credible economist denies the existence of a Laffer Curve, only where that all-important maximum is. If we’re to the left of it, then we would gain more revenue by increasing taxes. If we’re to the right, we would gain more revenue by cutting taxes.
The Reagan administration believed that we were to the right of the maximizing tax rate, and that we should therefore cut taxes. So they did. Heavily. Were they correct? Well, it’s impossible to say for sure, because the economy is a complicated beast. However, income tax revenues increased in real dollars from $312B in 1981 to $354B in 1989, so it’s quite possible.
Source: http://reagan.webteamone.com/revenues.cfm
Jeff
Anyone care to elaborate on what the hell crypto-fascism is? I thought it was some made up term, judging from the past Pit thread about it…
It’s Chumpsky’s word for “icky”.
Well, crypto- means hidden, so I guess a crypto-fascist would be someone who’s fascist, but pretends he isn’t.
Yes. Essentially for the rich and poor only. This is because Reagan cut so many tax deductions, it bumped a bunch of people up to the next tax bracket. People making between 50k and 1 million (joint) paid an extra 24 billion total. While those making 1 million and up saw an average cut of around 200k and those making under 50k saw a cut of between 5 bucks and around 1000.
Not a great reform for the middle class.
Probably not, though. Over half of that increase came immediately after the '86 reform. People making between 50k and 1 million paid that extra 24 billion due to things like closed loopholes, loss of deductions, etc. that have nothing to do with the economy. So now we have an 18 billion that could have had something to do with the decrease in taxes for the wealthy and the poor. But, really, what we are talking about is an average of 2 billion a year that would have come about naturally from the economic resurgence that took place in the '80s (starting from before the tax cut).
Quite frankly, it’s doubtful that Reagan’s tax cuts did anything for the economy. Far more likely that increased government expenditures caused it.
Yay for government spending!
<nitpick>
That’s the National Debt, not the Federal deficit.
To emphasize the difference:
For the last couple of years, there has been no Federal deficit.
However, the National Debt is still over $6 Trillion.
</nitpick>
But even if you figure in the 24 billion associated with increased taxes for the middle class, that’s still an increase in revenues of 18 billion, rather than the tremendous losses that everyone predicted. The fact that huge tax cuts were not associated with huge revenue losses - that in fact, they were associated with moderate increases in revenue - is quite worthy of attention. I would say it’s far from certain that supply-side economics was a resounding success, but it’s equally far from certain that it did anyone any harm, as many of Reagan’s critics are quick to claim.
Jeff