The recession under Reagan was an entirely different sort of economic phenomena. There was a huge amount of inflation at the time, and the federal reserve decided to raise rates as high as needed to conquer it. This naturally lead to a large amount of unemployment. When inflation started finally going down, the federal reserve let off the extremely high interest rates, unemployment predictably went back down as well. Whatever effect Reagan's economic policies had, they were largely secondary. It was primarily a monetary phenomena, not a fiscal one.
Yes, most recessions are the result of monetary and Government policies that interrupt the economic cycles in a negative way due to unintended circumstances as a result poor monetary decisions and poorly thought out legislation. The housing market collapse is evidence of both.
No one is ascribing the economic recovery to Reagan other than acknowledging the fact that he understood that reducing the scope and command of Government on individuals and the economy was a good idea. Reagan could not implement his economic agenda as he had a hostile Democratic House his entire Presidency which announced his budgets DOA every year.
Would you rather have the economy controlled by supply and demand and millions of personal interactions by people spending their own money; or have confiscatory tax policies that argue that only Government knows what is best for its citizens and can create demand at will?
I can't understand this right wing obsession with tax cuts as a panacea for all economic ills.
This is a strawman; the right wing is not obsessed with tax cuts as being a panacea for economic ills. They correctly comprehend that more money in the hands of those who EARNED it is a better idea than allowing a bunch of corrupt politicians buy the votes of low information twits who think they are entitled to others wealth.
I can’t understand the left wings obsession with the idea of tax increases being the panacea for economic ills and their Marxist like rhetoric about income inequality. Perhaps you can better explain it?
The government may not be the people, but neither is it a black hole, taxes aren't subtracted from GDP. I've never seen a convincing and clear correlation between tax rates and economic growth.
There is no clear correlation between tax rates and economic growth; but what we do know is that if people keep more of what they earn, they tend to spend and invest it and this is a good thing.
We also know that Government is indeed a necessary evil that a wary and educated society need to keep in check to ensure our liberty and freedoms.
What conservatives will do is cherry pick the data, "Oh, things were good for a few years under Reagan", "Oh, North Dakota's doing good currently, it must be their tax policy". Guess what, I can pick a few years in a few places that were great in high tax places as well. Norway has a spectacular economy right now, I'm sure it's all due to their 55% marginal income tax rate and 25% GDP (more than double the Obamunists current tax rate as a % of GDP), it probably has no more to do with any oil boom than North Dakota's case does.
The only one’s cherry picking the data are Liberals who want to defend this Imperial Presidency and its desire to spend trillions more it does not have on emotional drivel that does nothing to increase prosperity or reduce poverty.
This is not an enlightening intellectual exercise. No country has ever tax-cut itself out of poverty, indeed, almost all of the countries that have raised themselves from poverty in the past hundred years had very large, invasive government.
This is false; no nation ever taxed its way into prosperity. Please illustrate what nations raised themselves from poverty with massive invasive Government. China is a great example of invasive Government; how is that working for the Chinese whose average worker has a low life expectancy, suffers from massive pollution and whose GNI is a trivial $4,940?
How is it working for Venezuela, or for Cuba? How is it working in the EU which is suffering from stagnant economic growth and double digit unemployment?
But 50 years of incredible growth in South Korea apparently mean nothing. The right would rather exaggerate the mediocre and short lived economic performance in Pinochet's Chile instead. Anytime you get a smidgen of growth in a low tax regime, it will be praised to high heaven, anytime you get the same growth in a high-tax one, it's all "fake", as if Adam's Smith invisible hand is eventually going to come down and punish these disrespectful people who dare grow without his approval. Yet, these economies keep keep on with their fake growth, year to year, the Hunanese peasant has discovered that fake food fills the stomach, and is so heedless to the condemnation of foreign conservatives that he be eating it.
How is South Korea a high tax country?
The South Korean Corporate Tax Rate in South Korea stands at 24.20 percent. The US is 35%.
TAXABLE INCOME, KRW (US$) TAX RATE
Up to 12 million (US$10,321) 6%
12 million – 46 million (US$43,396) 15% on band over US$10,321
46 million – 88 million (US$83,019) 24% on band over US$43,396
88 million – 300 million (US$283,019) 35% on band over US$83,019
Over 300 million (US$283,019) 38% on all income over US$283,019
US tax rates
Up to $8.9K – 10%
8.9 to 36.25K – 15%
36.25 to 87.86K – 25%
87.86 to 183.25K – 28%
183.25K to 398.35 – 33%
398.35 to 400K – 35%
Above 400K – 39.5%
I would argue that the South Korean rates are lower.
In reality, all lowering tax rates by eliminating transfer policies does is to shift consumption patterns. Before, more of the economy was focused on producing things rich people like, now it's less so. It has pretty much zero net economic effect.
This is hyperbole with nothing to support it. Lowering tax rates does not shift consumption patterns. But intrusive Government policies based on an abomination like the tax code does; and many times with very negative effects as we have seen over the last five years of malaise.
Lowering it by reducing infrastructure and other investments has a definite net negative effect.
I am amused by the FALSE argument that lowering tax rates has a corresponding decrease in infrastructure outlays. How is this possible?
The only place where it could unambiguously help would be with the military - shifting consumption to military matters is not an economic black hole either, but it's not a sector with in built long term ability to innovate and produce economic growth itself, and is only justified if foreign threats are large. But this is apparently the one thing we should keep, we should drop transfer payments with zero net effect, reduce infrastructure and investment in our future, and increase our dedication to an economically stagnant area.
I have no idea what the above means or what you are trying to say; but it looks like a bunch of confused gobbledygook.
The bottom line to your commentary is that you have done an outstanding job of avoiding the topic and ignoring the editorial source on supply side economics.
