The questions of the day are, why do we want to cut taxes on everyone when we need more money for capital improvements such as schools, roads, and such? Why doesn't the government do more "stimulus"? Why am I struggling soooooo much?
Below I compare the economics impact of "Trickle-Down Economics" of the Reagan Administration as compared to the Keynesian economic policies of the Obama Administration.
| Ronald Reagan 81-82 recession At the peak of recession: 10.8% unemployment 13.5% inflation 21.5% prime interest rate 15.2% poverty rate After 7 quarters, (1.75 years) 7.5% unemployment 3.2% inflation 14.4% poverty rate Reagan took a worse situation, (including stagflation), and in less than 2 years improved it far better than Obama did in almost 4  | Barack Obama 2008-09 recession At the peak of recession: 10% unemployment 4.7% inflation 7.75% Prime Interest rate 12.5% poverty rate 3.75 years later...... 7.4% unemployment 1.5% inflation 15% poverty rate Obama took what was obviously a bad situation and to his credit did keep it from reaching Great Depression levels but the increase in the poverty rate is very concerning especially given the extremely low inflation rates and interest rates  | |
What is Supply-Side or Trickle-Down economics? It is a policy of cutting taxes as a way to stimulate growth in the economy. Why do the rich seem to benefit more? According to Arthur Herman: "It's because people with higher incomes are more likely to capitalize their savings as investments aimed at bringing a lucrative return, whether it's
expanding their own business (as when a dry cleaner opens a new store and hires new workers to run it) or someone else's.
Here are some other stats to show that Trickle-Down economics did work in the 80's and 90's.
During this seven-year recovery, the economy grew by almost one-third, the equivalent of adding the entire economy of West Germany, the third-largest in the world at the time, to the U.S. economy. In 1984 alone real economic growth boomed by 6.8%, the highest in 50 years. Nearly 20 million new jobs were created during the recovery, increasing U.S. civilian employment by almost 20%. Unemployment fell to 5.3% by 1989. In addition, real per-capita disposable income increased by 18% from 1982 to 1989, meaning the American standard of living increased by almost 20% in just seven years. The poverty rate declined every year from 1984 to 1989, dropping by one-sixth from its peak. The stock market more than tripled in value from 1980 to 1990, a larger increase than in any previous decade.,(Peter Farrara)
expanding their own business (as when a dry cleaner opens a new store and hires new workers to run it) or someone else's.
Here are some other stats to show that Trickle-Down economics did work in the 80's and 90's.
During this seven-year recovery, the economy grew by almost one-third, the equivalent of adding the entire economy of West Germany, the third-largest in the world at the time, to the U.S. economy. In 1984 alone real economic growth boomed by 6.8%, the highest in 50 years. Nearly 20 million new jobs were created during the recovery, increasing U.S. civilian employment by almost 20%. Unemployment fell to 5.3% by 1989. In addition, real per-capita disposable income increased by 18% from 1982 to 1989, meaning the American standard of living increased by almost 20% in just seven years. The poverty rate declined every year from 1984 to 1989, dropping by one-sixth from its peak. The stock market more than tripled in value from 1980 to 1990, a larger increase than in any previous decade.,(Peter Farrara)
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