Re: Is Anyone In This Group Enthusiastic About Any Candidate?


"Islander" <nospam@xxxxxxxxxxx> wrote in message
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John Galt wrote:
"Rumpelstiltskin" <PleaseDoNotReplyByEmail@xxxxxxxxxxx> wrote in message
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---[snip]---

Carter only ran up a fraction of the deficits that Reagan and the
Bushes ran up for the same period of time. Yeah, I guess I would
have bitched about the Carter deficits if I'd been paying attention
at that time, but there's no comparison with what came later.

No, but at the time, the deficit was one of the issues that propelled
Reagan into office. It was, at the time, considered "runaway", and in the
context of the overall economy (not gross dollars) it wasn't much
different than it was today.


I recall that period very well since I was in the DC area at the time. It
was not the size of the deficit that was the issue at the time, but the
out-of-control interest rates that everyone including the federal
government was paying. There was a great deal of concern over the amount
of credit that was being bought up by foreigners and speculation about how
that might influence US foreign policy. The deficit was low during the
Carter years, but the interest was killing us.

I remember it differently as far as emphasis, but both were in play, IIRC.

While Carter gets most of the blame for the high inflation rate of the
period, the blame really goes back to Fed Chairman Arthur Burns who
increased the money supply in an effort to get Nixon reelected in '72.

The inflationary period was substantially attributable to Nixon. In "Money
Mischeif", Milton Friedman notes that the hyperinflation was largely the
result of Nixon telling Burns to crank up the printing presses so as to pay
of Vietnam debt.

Carter's deficit spending (as a percentage of the GDP), despite the higher
interest rates, was less than the Nixon/Ford administration which preceded
it and the Reagan deficit spending was nearly twice that of the Carter
administration. If it had not been for Paul Volcker (appointed by Carter)
who deserves the real credit for ending the runaway inflation, Reagan
would have been in very serious financial difficulty.

Correct, but to be fair, let's note that the POLICY followed by Voelker --
crank up the interest rates and choke the inflation beast -- was a consensus
policy developed by Voelker and Friedman and authorized by Reagan. In fact,
Friedman notes that one of the reasons why the debt went up so far under
Reagan is because they expected the Fed's tight money policy to take longer
to be effective, and thus they counted on more tax bracket creep than they
got. No creep, lower tax receiepts.

JG


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Relevant Pages

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    ... No, but at the time, the deficit was one of the issues that propelled ... Reagan into office. ... deficit was low during the Carter years, ... counted on more tax bracket creep than they got. ...
    (soc.retirement)
  • Re: Is Anyone In This Group Enthusiastic About Any Candidate?
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