Posted by: Deborah D | August 15, 2011

Reagan v. Obama stimulus plans.

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Reagan v. Obama stimulus plans.

Once again Democrats are hinting that what the country needs is another stimulus. That is exactly what the country doesn’t need, at least Obama’s type of “stimulus” – more debt tagged onto our already outrageous debt in order to spend on what? Nothing that will stimulate the economy, that’s what. So what did Reagan do to stimulate? Something Obama doesn’t plan to try since he’s the anti-Reagan. This is from Paul G. Kengor in USA Today.

Reagan’s initiative was the antithesis of President Obama’s $800 billion “stimulus” that didn’t stimulate. The 2009 version was the single greatest contributor to our record $1.5 trillion deficit. It was, plain and simple, what Reagan didn’t do.

When Reagan signed the Economic Recovery Act at his ranch near Santa Barbara, it was the largest tax cut in American history. He also revealed leadership that Democrats and Republicans alike agree we are not seeing currently from the White House. Even TheWashington Post called Reagan’s action “one of the most remarkable demonstrations of presidential leadership in modern history.”

The enemy that day was America’s progressive federal income tax system, birthed in 1913 by Congress and President Woodrow Wilson. (Wilson was a “progressive” Democrat) It was revolutionary, requiring a constitutional amendment. That tax, which began as a 1% levy on the wealthy, would rocket up to a top rate of 94% by the 1940s.

Ronald Reagan personally felt the toll. In the 1940s, the so-called “B”-movie actor was one of the top box-office draws at Warner Bros. Then a Democrat, Reagan saw no incentive in continuing to work — that is, make more movies — once his income hit the top rate. He also realized who suffered from that choice. It wasn’t Reagan; he was wealthy. It was the custodians, cafeteria ladies, camera crew and working folks on the studio lot. They lost work.

Reagan viewed such rates as punitive, confiscatory — “creeping socialism,” as he put it. In speeches in the 1950s and 1960s, he blasted the tax as right out of Marx’s Communist Manifesto.

See if the next sentence reminds you of something we’re experiencing right now.

By the late 1970s, Reagan concluded that out-of-control taxes, spending and regulation had sapped the economy of its vitality and ability to rebound. And so, on that August day in 1981, Reagan, with a Democratic House and Republican Senate, secured a 25% across-the-board reduction in income tax rates over a three-year period beginning in October 1981. Eventually, the upper rate would drop to 28%.  Snip –

After a slow start through 1982-83, the stimulus effect of the cuts was extraordinary, sparking the longest peacetime expansion in U.S. history. The “Reagan Boom” not only produced widespread prosperity but — along with the attendant Soviet collapse — also helped generate budget surpluses in the 1990s. Carter-Ford era terms such as “malaise” and “misery index” vanished. Only now has America re-approached similar misery-index levels, reaching a 28-year high.  Snip –

Reagan inherited chronic deficits. Since Franklin Roosevelt, the budget had been balanced a handful of times, mainly under President Eisenhower. From 1981-89, the deficit under Reagan increased from $79 billion to $153 billion. It peaked in 1983-86, hitting $221 billion. Yet, once the economy started booming, the deficit steadily dropped.

Tax cuts were not the problem. Tax revenues under Reagan rose from $599 billion in 1981 to nearly $1 trillion in 1989. The problem was that outlays all along outpaced revenue, soaring from $678 billion in 1981 to $1.14 trillion in 1989.

…the culprit was not just social spending by congressional Democrats but Reagan defense spending designed to take down the Soviet Union. What a bargain that turned out to be: It helped kill an “evil empire” and win the Cold War, paving the way for a peacetime dividend in the 1990s.

Our current administration refuses to learn the lessons of history.

… our problem remains excessive spending. Obama must bear this in mind if he’s considering tax increases (which hamper growth) as part of his “balanced” approach to deficit reduction. More than that, the best “stimulus” relies on the tried-and-true American way: Let free individuals stimulate the economy through their earnings and activity.

Obama and the Democrats, as true believers in government as the answer to everything, can never admit that Reagan’s ideas for growing the economy are the true answer to our problems in 2011. It just doesn’t fit with their world view. Evidence of where our country is going can be found in the recent riots in London and previous riots in Greece. Perhaps that is the evidence our Republican challengers to Obama’s leadership should be focusing on. Ask Americans: Is this the future you want for your country? I believe they’ll answer that question with a resounding “NO” in 2012. Read it all here:


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  1. He’s not told us we must wait till September for the fool to unleash his new plan for destroying America. You can bet that whatever he says to do the opposite will be the better course. I guess he has to go on vacation to make up some new worthless big govenment spending ideas.

    • You are so right ! Obama has no intention to make this economy rebound. He, without a shadow of a doubt wants to choke old Uncle Sam out till he’s no longer breathing. And then Obama can start this Country over from the ground up based on his Marxist radical socialist ideology . Where he and Pelosi and Reid can rule as Dictators forever in their Delusional Utopian Banana Republic. DO NOT VOTE FOR OBAMA IF YOU LIKE LIVING IN A FREE COUNTRY.

  2. Regan’s real Stimulus was the trillion or so that he pumped into star wars. Lets not forget that regan also raised taxes a number of times after he lowered them, and left a huge debt.

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