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

John Galt wrote:
"Islander" <nospam@xxxxxxxxxxx> wrote in message news:ceednRU-wZD3WBfanZ2dnUVZ_qGknZ2d@xxxxxxxxxxxxxxxxx
John Galt wrote:
"Islander" <nospam@xxxxxxxxxxx> wrote in message news:1-ydnU-zevozxhfanZ2dnUVZ_t2inZ2d@xxxxxxxxxxxxxxxxx
John Galt wrote:
"Rumpelstiltskin" <PleaseDoNotReplyByEmail@xxxxxxxxxxx> wrote in message news:ounio3d3ka0ufksseg2it59avk16kv5gdi@xxxxxxxxxx
---[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


The economy is not zero sum, but it is clear that there are trade-offs. One can get the appearance of better times by borrowing. Ultimately you have to pay.
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Relevant Pages

  • Re: Is Anyone In This Group Enthusiastic About Any Candidate?
    ... propelled Reagan into office. ... It was not the size of the deficit that was the issue at the ... The deficit was low during the Carter years, ... and thus they counted on more tax bracket creep than they got. ...
    (soc.retirement)
  • Re: Is Anyone In This Group Enthusiastic About Any Candidate?
    ... Carter only ran up a fraction of the deficits that Reagan and the ... No, but at the time, the deficit was one of the issues that propelled ... Reagan into office. ... While Carter gets most of the blame for the high inflation rate of the ...
    (soc.retirement)
  • Re: Is Anyone In This Group Enthusiastic About Any Candidate?
    ... No, but at the time, the deficit was one of the issues that propelled Reagan into office. ... 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. ... The deficit was low during the Carter years, but the interest was killing us. ... On the other hand, it's bad, because it encourages the manufacturers to jack up the prices until the monthly payment hits the consumer pain point, as opposed to the cash price hitting the pain point. ...
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  • Re: Is Anyone In This Group Enthusiastic About Any Candidate?
    ... 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?
    ... No, but at the time, the deficit was one of the issues that propelled Reagan into office. ... 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. ... The deficit was low during the Carter years, but the interest was killing us. ... 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. ...
    (soc.retirement)