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


"Islander" <nospam@xxxxxxxxxxx> wrote in message
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John Galt wrote:
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John Galt wrote:
"Rumpelstiltskin" <PleaseDoNotReplyByEmail@xxxxxxxxxxx> wrote in
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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


Yep, the hidden tax increases of the Reagan administration! Didn't work
just as the trickle down economy didn't materialize. Left the mess to GHW
Bush to eat the necessary tax increase.

Economy wise, Reagan was more of a disaster than Carter!

Carter was simply feckless. He had no idea how to solve the problems he was
left with, but he didn't do any additional damage. Considering the record of
the other presidents from Johnson on, that's high praise.

Was Reagan more of a disaster? Like most things economic, you have to first
decide what statistics you think are most important, which is a subjective
exercise. One of my annoyances with partisan analysis is that the stats are
always cherrypicked to justify the desired conclusion, not the other way
around.

We had staglation at the beginning of his term. Unemployment in 1981 was
7.6% and inflation was almost 11%. On the way out, 5.5 unemployment and 4.6%
inflation. Good results by any measure.

The increase in the debt is, of course, another matter.

JG


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