Monday, January 24, 2011
But we have a Democrat President in Obama who is simply head over heals...
For President Reagan.
I was going to reprint what Mr Obama wrote in USA Today this morning, 1/24/11 but it was just a little too nauseating an experience so instead, I will simply provide the link to the Reagan 'love letter'.
I am actually not a Reagan hater. And if my blog was on psychology or public speaking, then I would write many complimentary pieces on how he convinced most of the nation to feel good about themselves
But I write on economics, so I can not ignore the 'How' and 'Why' those people felt so good, nor ignore the fact that many others, especially the lower middle class and working poor, suffered economically due to Reagan's fiscal policies.
The media then as they do today, focused on Wall St and corporate profit growth while completely ignoring the economic bottom third. And due to the sudden boom in credit cards availability due to changes in law which allowed uniform interest rates for cardholders in all 50 states which took power out of the hands of the individual states to stop credit card gouging, middle class people were able to spend, spend, spend while completely oblivious to the beginnings of their decline which finally is becoming noticeable in 2011.
Official National Debt figures for each year are usually released at the end of September of each calendar year. In 1980, which was the last year of Carter's Presidency, the Debt was $826.5 Billion. By Sept of 1988, the last year for Reagan, the National Debt was $2.6 Trillion- An Increase in US Total Debt by 314% in 8 years.
To give some perspective, it took 35 years (1945-1980) for the National Debt to rise 320% ($258 billion in '45 to $826 billion in '80). It took Reagan 8 years.
Reagan also gutted Social Security. The idea was this- lower taxes for everyone, especially the wealthy. This would stimulate economic growth causing a "Trickle Down" effect to the masses. Meanwhile, he increased Social Security taxes supposedly to strengthen the system so it would never be in risk of insolvency But... by cutting taxes and increasing spending, Reagan found he was always short in his budgets. So where to get the money to cover the difference? Take from the Social Security taxes with the goal of repaying it back later-- nudge nudge...wink wink.
So workers paid more and more into Social Security for their retirements, that money was taken to pay for the arms race and other Reagan policies to cover the tax cuts that made people feel so 'good' about life, and future Presidents copied the concept so perfectly that Social Security today is in terrible shape.
To seek some sort of brevity, so ends the history lesson on Reagan's economic policies for today. But I end this post with one reflection. People do Not write glowing accolades about people they do not admire and seek to emulate. And Obama's admiration and desire to be Reaganesque does not stop with communication style.