The Gipper's 100th something to celebrate but Reaganomics? Nah
By Dian Vujovich
It always amazes me when, after someone dies, that individual always somehow turns into a Saint of some sort by those who loved him or her. Guess that’s the heart for ya. So when the whole world was lifting our 40th president up to that level during what would have been his 100th birthday recently, in all the remembrances, I didn’t hear anyone mention the first thing that comes into my mind when I think of President Reagan: Trickle-down economics.
Because all things wonderful that Ronald Reagan ever accomplished have already been pointed out, in an effort to balance things out a bit, here are a few things to keep in mind too:
• When The Gipper took office in 1981 the highest tax bracket was 70 percent, fell to 50 percent in the years 1983 to ’86; reduced to 38.5 percent in 1987; and in 1988 and 1989 to 28 percent. (By 1991, during the first Bush presidency, the highest rate moved up to 31 percent.)
• GDP growth did increase after the 1982 tax cut, went high as 7.3 percent in 1984 but fell to negative levels in 1991.
• Back to those huge cuts in max tax rates, two additional results were that the budget deficit and federal debt grew big time.
• In 1980, debt grew from 33 percent of GDP in 1980 to 52 percent in 1988. As for the deficit, it represented 2.7 percent in 1980 and by 1983 was at 6 percent.
•To cover that debt, the US borrowed lots and lots of money. That moved America from being the world’s largest international creditor to the world’s largest debtor nation.
Reagan himself said that this new debt was the “greatest disappointment” of his presidency.
In sort, Trickle-down economics didn’t work for the masses as promised it would by this charismatic U.S. President who served from 1981 to 1989. Cutting the top tax rates also didn’t lead to income growth or wage growth—except for the wealthy. It did cause more national debt and widened the chasm between the rich and poor.
At a time when America’s debt is huge, the middle class dwindling and the numbers of those in poverty growing, it would be wise to remember the bottom line result of Ronald Reagan’s Trickle-down economic policies.
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