In the March 6 edition, Mr. Rod Livdahl presented a lively and articulate apology for the tax/borrow/spend insanity running amok in our country. The presentation lacked only one component of importance—accuracy.
Mr. Livdahl proudly observed that our current debt to EDP ratio (102.9 percent) is lower than it was at the end of WWII, but forgot to put that figure in perspective. Russia is at 8.8 percent, Hong Kong at 4 percent, and China at 16.3 percent. The average for all countries, including Greece, is around 50 percent, which economists consider the safe upper limit for that statistic. Current projections have our ratio of debt to EDP rising to 112 percent by 2016.
Mr. Livdahl correctly alluded to our remarkable post-war growth. His analysis for the cause of that growth is suspect, however. He attributed the recovery to government spending for infrastructure, such as the Interstate highway system. But, the interstate system didn’t even begin until 1956, 12 years after the end of the war, at which time the recovery was an accomplished fact. The other infrastructure projects he mentioned were done by local governments, and were economically insignificant in scope.
Another point that Mr. Livdahl failed to consider was that the Truman government eliminated the war taxes, which freed up the capital necessary to fuel private industry. A valuable lesson could be learned from that. Cutting taxes led a quick recovery from a long and painful depression caused and sustained by massive government spending and foolish regulation.
I don’t know how old Mr. Livdahl was during the Reagan years. Those of us able to remember that period recall an era of unprecedented prosperity and growth, standing in contrast to a dismal time of recession under the previous administration. The turnaround was unquestionably the result of lower taxes and reduced regulation. Reagan inherited a bigger mess than Obama did, and had it cleared up well before his next election. Obama took the opposite approach and we sank deeper into the doldrums.
The evidence has been out there for thousands of years. government control, whether monarchy, dictatorship or quasi-democratic excess, has produced poverty and misery wherever it has existed. Free enterprise has always produced prosperity and happiness. Freedom is more successful than “sensible politicians.”
Don Carsten
Gilbert
Rich posted at 1:34 pm on Sun, Mar 10, 2013.
I lived through both eras, the malaise between them and can observe the mess. I sincerely doubt Mr. Livdahl can say the same, or if he can he did it with a silver spoon in his mouth. I started in business when Nixon was President, he nearly bankrupted me with price controls and inflation that just got worse and worse through Ford and Carter. Government regulations made everything more expensive, while taxes restricted what you needed to start a new business or expand the one you had. Then came Reagan, and it all got easier.
My father had a similar experience at the end of WWII, he used to tell me how Kennedy and Johnson stifled business with taxes and regulation. The Great Society, the 'War' on poverty, expanding government and especially social work into a virtually unmanageable and wasteful bureaucracy.
Reagan had a bigger problem than Obama and he handled it entirely and gave us some much needed prosperity before he ran a second time. It isn't really how much you spend, it's what you spend it on. Reagan, by and large, showed a profit, and Obama continues to shove it into the sewer.
As I said, been there done that, and bought all the tee shirts. You can cherry pick facts and figures, spin and misrepresent them as Mr. Livdahl likes to do, but if you really want to know what it was like, ask those who lived through it.
Mike McClellan posted at 2:12 pm on Sun, Mar 10, 2013.
Coming after the feckless Carter years, Reagan might've seen like perfection by comparison.
As a young married guy with two kids and two jobs to make ends meet, I found the Reagan years much better than the previous four under Carter. My two jobs seemed to do better under Reagan than Carter.
However, the mist of time apparently have fogged the memory . . .
During Reagan's years, the national debt grew to $3 trillion, and the deficit tripled.
After Reagan dramatically cut taxes in his first year, the materialized revenue from increased private spending didn't materialize, and over the next 7 years, Reagan raised taxes 11 times, including an almost-complete rollback of the '81 tax cuts.
Far from the dramatic decrease in the size of the federal government, its size grew under the 8 years of Reagan, including adding a new department, the Department of Veterans Affairs.
Under President Reagan, the number of federal employees grew by about 250,000.
As to which President had the greater economic dilemma to deal with, I'll leave that one to the economists and historians. But to say Reagan "handled it entirely" is to ignore the massive debt accrued while he was in office.
truth posted at 3:53 pm on Sun, Mar 10, 2013.
NAME OF RECESSION PEAK UNEMPLOYMENT GDP DECLINE
1960-61 7.1% -1.6%
Another primarily monetary recession occurred after the Federal Reserve began raising interest rates in 1959.
1969-70 6.1% -0.6%
The relatively mild 1969 recession followed a lengthy expansion. At the end of the expansion, inflation was rising, possibly a result of increased deficits.
1973-75 9.0% -3.2%
A quadrupling of oil prices by OPEC coupled with high government spending because of the Vietnam War led to stagflation in the United States. The period was also marked by the 1973 oil crisis and the 1973–1974 stock market crash. The period is remarkable for rising unemployment coinciding with rising inflation
1980 7.8% -2.2%
The NBER considers a short recession to have occurred in 1980, followed by a short period of growth and then a deep recession. Unemployment remained relatively elevated in between recessions.
1980 10.8% -2.7%
The Iranian Revolution sharply increased the price of oil around the world in 1979, causing the 1979 energy crisis. This was caused by the new regime in power in Iran, which exported oil at inconsistent intervals and at a lower volume, forcing prices up. Tight monetary policy in the United States to control inflation led to another recession.
1990 7.8% -1.4%
After the lengthy peacetime expansion of the 1980s, inflation began to increase and the Federal Reserve responded by raising interest rates from 1986 to 1989. This weakened but did not stop growth, but some combination of the subsequent 1990 oil price shock, the debt accumulation of the 1980s,
2000 6.3% -0.3%
The 1990s were the longest period of growth in American history. The collapse of the speculative dot-com bubble, a fall in business outlays and investments, and the September 11th attacks, brought the decade of growth to an end.
2007 10% -5.1%
The subprime mortgage crisis led to the collapse of the United States housing bubble. Falling housing-related assets contributed to a global financial crisis, even as oil and food prices soared. The crisis led to the failure or collapse of many of the United States' largest financial institutions: Bear Stearns, Fannie Mae, Freddie Mac, Lehman Brothers and AIG.
The History of U.S. Recessions
Rich posted at 4:40 pm on Sun, Mar 10, 2013.
Mike,
Once again you cherry pick numbers. In this case out of context. Where are these figures in the context of the GDP? The size of the economy as a whole? Throwing out a figure of three trillion is meaningless without noting inflation rates, What Reagan did was to get the economy going first, and then keep government growing at near the same rate, keeping everything in phase, in the best possible relationship. Obama didn't do first things first, he grew the government apparently (as the last quarter of 2012 featured an economic contraction) to the detriment of the economy. It's not really hard to see, and it's rather silly for you and Mr. Livdahl ( as well as Truth I see) to continue to cherry pick things that only have relevance within a context you're not stating. Reagan made it better by your own admission, the only thing that is becoming increasingly obvious is that Obama is making it worse.
truth posted at 5:13 pm on Sun, Mar 10, 2013.
The three greatest recession from 1960 were under Republican Presidents: NIXON, REAGAN AND GEORGE W. BUSH.
Cerulean posted at 5:59 pm on Sun, Mar 10, 2013.
Rich, what determines inflation?
"What Reagan did was to get the economy going first," How did he do that? My guess is that you would say ''He cut taxes." He also increased government spending - nothing taken out of context there.
Rich posted at 6:42 pm on Sun, Mar 10, 2013.
truth, actually, you forget the end of the Korean war, under Eisenhower, earlier but also a Republican. Nixon and Reagan inherited them from Democrats, Bush did it himself, but then the correction was due far too much funny money floating around. Reagan gave us the longest period of prosperity in our history.
Cerulean, look it up. When money floats, if it's value keeps being assaulted so that less and less backs it, it becomes worth less. Like watering whiskey.
Rich posted at 6:46 pm on Sun, Mar 10, 2013.
Effing filter...
Reagan did a number of things, and the combination worked. Obama has done relatively nothing right, therefore nothing works. That is the context and the plain fact in front of your nose. Why is everybody trying so hard to see the writing that is clearly on the wall?
Mike McClellan posted at 7:14 pm on Sun, Mar 10, 2013.
Well, Rich, "cherry pick" is your default criticism, but it's funny how you never can counter with anything but bloviating.
Next, you'll credentialize, since that's your second line of offense.
Reality is reality: Government grew under Reagan, not shrunk. The national debt hit an all-time high. And the federal government actually had more employees at the end of Reagan's terms than before.
If deficit spending and exploding the defense budget is your formula for a successful Presidency, then Reagan was your man. And so was Bush II.
And since you want context, prior to Reagan, the national debt was 33% of the GDP; at the end of Reagan's time, it was 53% of the GDP.
Rodini posted at 7:38 pm on Sun, Mar 10, 2013.
Those of us able to remember that period recall an era of unprecedented prosperity and growth
Writer obviously has forgotten as well....that Reagan ran up greater deficits than all previous Presidentys in American history...just the same as happened to expand growth after WWII.
And exactly what Bush did as well, but exactly the opposite of what today's Republican Party is demanding (during the Obama administration)?????
Funny how deficit spending was OK for Reagan, Bush Sr. and Bush Jr. but HEAVEN FORBID defictis when a Democrat holds the White House?
Such blatant hypocrisy...that thankfully more Americans are finally figuring out for themselves!
downtownresident posted at 7:42 pm on Sun, Mar 10, 2013.
"Those of us able to remember that period recall an era of unprecedented prosperity and growth, standing in contrast to a dismal time of recession under the previous administration."
You're talking about Bill Clinton, right?
Look what he left for "W". A lot more than he was given to start!!!!!!!!
Ateam1 posted at 8:02 pm on Sun, Mar 10, 2013.
Rodini: Are you OK with Obama's Budget? He has done such an excellent job,Hasn't He? Printing press never cool's off!!! Care to Discuss?
Rich posted at 9:41 pm on Sun, Mar 10, 2013.
"Those of us able to remember that period recall an era of unprecedented prosperity and growth."
And those of you with a partisan axe to grind, try so desperately to come up with reasons why it wasn't. Mike the system's target was 50% and it proved about on target. what is it now? Over 100%? What Reagan did worked. so do what he did. Get the country back into the proper relationship between government and business, between the deficit and the GDP. That was the balance that worked, made everything work.
Credentializing now. I know because I lived through it. And I know what Obama is doing doesn't work, because, ready for another credential, I see the result in front of my face and don't have to drag up 30 year old statistics to quote them out of context that it is all someone else's fault. It isn't.
And cherry pick is what you do Mike. How did you ever teach Mike, when you are unable to recognize dialectic and whenever caught about all you do is figure out a big word to name call. The point was that whatever Reagan did, it succeeded, and whatever Obama is doing is a failure. The facts you offer A) don't even dispute that and B) Are simply sour grapes aimed at finding someone else to blame. Offer something that makes sense.
Cerulean posted at 8:37 am on Mon, Mar 11, 2013.
Rich,
Reagan started us on the path as a debtor nation and every Republican since has continued that policy.
How is that defined as success?
Mike McClellan posted at 8:56 am on Mon, Mar 11, 2013.
Yeah, let's do what Reagan did . . .
A. amnesty for illegal immigrants
B. record deficits and debts
C. ignoring terrorist attack (remember the Marine barracks in Lebanon? remember Reagan's response? Nothing)
D. cut taxes and increase spending
DonMey posted at 9:56 am on Mon, Mar 11, 2013.
Anyone who lays the blame solely on the politics of the other side is either lying, or a moron.
chatmandu002 posted at 9:59 am on Mon, Mar 11, 2013.
Social Security, Medicare and Medicaid have destroyed our economy and is threatening our future. Until everyone realizes that, we will be no chance for recovery.
truth posted at 4:39 pm on Mon, Mar 11, 2013.
Reagan raised taxes 12 times
Accuracy posted at 6:03 pm on Mon, Mar 11, 2013.
chatmandu002 posted: “Social Security, Medicare and Medicaid have destroyed our economy and is threatening our future.”
Well, “Medicaid Welfare” for sure.
Workers pay 6.2 percent of their earnings into the Social Security system, and employers pay a matching 6.2 percent for each worker. But the Social Security trust fund has been raided for years to balance the out-of-control budget that the elected Congress reps have wildly spent. Even though it's not their money – it belongs to Social Security – and it’s not for Congressional spending.
Rich posted at 6:48 pm on Mon, Mar 11, 2013.
Yeah, let's do what Reagan did . . .
A. amnesty for illegal immigrants
B. record deficits and debts
C. ignoring terrorist attack (remember the Marine barracks in Lebanon? remember Reagan's response? Nothing)
D. cut taxes and increase spending
Reagan raised taxes 12 times
AND IT WORKED!!!
Let's just say I cherry pick 5 things Obama did, and say:
THEY DIDN"T WORK !!!!
If it's my 'default criticism' why do you (mentally challenged people) keep doing it?
Cerulean posted at 7:05 pm on Mon, Mar 11, 2013.
Reread Rodini’s post at 7:38
Rich posted at 8:21 pm on Mon, Mar 11, 2013.
"Funny how deficit spending was OK for Reagan, Bush Sr. and Bush Jr. but HEAVEN FORBID defictis when a Democrat holds the White House?"
The results aren't funny, and deficit spending is a technique that needs application at the right time, as well as forbearance at the wrong time. All you are really saying is the Republicans have used it well and the Democrats poorly. It's a dynamic, not a static system. And forgiving, or championing Obama because he does all the wrong things at the wrong times is the ultimate hypocrisy. And labeling a technique right or wrong, without the context of the situation is just brain damaged.
Mike McClellan posted at 10:15 pm on Mon, Mar 11, 2013.
Well, we've finally found someone -- besides Dick Cheney -- who believes that Bush's deficit spending was a success. Sayeth Rich:
"The results aren't funny, and deficit spending is a technique that needs application at the right time, as well as forbearance at the wrong time. All you are really saying is the Republicans have used it well . . ."
Of course, Rich, the last eight years of the Bush administration and its deficit spending was a smashing success.
Add economist to your many credentials.
Rich posted at 7:01 am on Tue, Mar 12, 2013.
Mike,
You've been saying it all along. Obama can't be wrong doing it because Bush did. It's about 60% of your posts lately. And a good percentage of the rest have been Obama can't be wrong doing because Reagan did, as here. The sad fact is that six out of eight Bush years were successful while Obama is zero for four and we're stuck with Obama. You present nothing but petulance and even that poorly written and poorly thought out, what did you teach our children? Dialectic works if you progress from point to point, not start saying nah, nah, nah like it was recess in grade school. Which pretty much characterizes your latest posts.
"Reagan did a number of things, and the combination worked. Obama has done relatively nothing right, therefore nothing works. That is the context and the plain fact in front of your nose. Why is everybody trying so hard to see the writing that is clearly on the wall?" You stopped the progress at this point and started acting like a child. Do you have a mature, sensible answer here?
Mike McClellan posted at 8:03 am on Tue, Mar 12, 2013.
When someone makes the statement that Republicans "have used deficit spending well" is to ignore the history of the previous decade.
That's not name calling, that's an observation of someone cherry-picking a decade to "prove" Republicans use deficit spending well.
Rich posted at 10:53 am on Tue, Mar 12, 2013.
Mike,
" Republicans "have used deficit spending well"
That is the statement you, Rodini and truth tacitly made, I don't agree with it. They used it better than Obama has, but then Obama is an abject failure economically. Which is still the question, you've said nothing, taken what I said out of context to argue with it, when in essence you are arguing with truth Rodini and your own conclusions.
We have reached a certain plateau. You presented cherry picked stats which show nothing. Reagan succeeded, Obama is failing, and the fourth quarter of 2012 prove that with a failing economy, that is where we are at, not your petulant child asides. Address where the discussion is at, and stop the nah, nah responses.
Cerulean posted at 12:06 pm on Tue, Mar 12, 2013.
Rich, that is not the statement used by Rodini. Mike may have suggested that he "found the Reagan years much better than the previous four under Carter." That does not negate the fact that Reagan increased the deficit by $3 trillion, making some people feel better.
Rich posted at 12:23 pm on Tue, Mar 12, 2013.
Cerlean,
You miss the point too, and are really making the same argument, Reagan did (you may insert statements by Rodini, truth, MIke or even yours "increased the deficit by $3 trillion,") Reagan's program was successful, therefore whatever the thing is, he used it well, as opposed to Obama, who is a failure, and failed to use it well. What Reagan did worked, what Obama is doing isn't. That is the point all of you are running from, and the way you are doing it, cherry picking statistics from thirty years ago is only proving the point, or at least advocating it.
Ateam1 posted at 1:42 pm on Tue, Mar 12, 2013.
there's no discussion with the liberals on this site. It's about Barack Obama! He is going to teach the old Rich MEN a Lesson in ECONOMIC'S! Him , Coming from Chicago, surely could do better than this. It's all coming out in the WASH!
Mike McClellan posted at 4:40 pm on Tue, Mar 12, 2013.
The Bush Apologist -- Rich -- has this rich comment:
"The sad fact is that six out of eight Bush years were successful . . ."
By what measures? Economic? Sure, for the wealthiest, but for all but the top 15%, all of Bush's years were stagnant or loss of income. Job growth? Nope, Every year of the Bush administration featured increasingly lower job growth, until the final 18 months, where we bled jobs.
Foreign policy? Of course. Two unfunded wars, thousands of American kids killed, and the purpose of Iraq again was what?
What made the 6 of 8 years such a success, Rich? Cherry-pick away. Show us his success.
He was successful in growing the national debt, to over $10 trillion by the end of his tenure. He doubled the debt from the end of Clinton's terms in office.
There, clearly Bush was successful.
Rich posted at 6:27 pm on Tue, Mar 12, 2013.
Still on the same old track Mike. I didn't endorse either Bush, nor did I vote for either. This is just another installment of "It's Bush's fault." It's getting thin, silly and childish. That is not where the discussion is at, Are you a grown man or a child? It's been over four years. In two Reagan solved it and had everything on track to expand taxes, and even debt. the point, as Ateam1 just pointed out, isn't Bush, or Reagan, that's over and done with, and frankly, irrelevant. As keeps getting pointed out to you. The fact is that until the things I said would collapse, did, in Bush's last two years, he was on track to embarrass me. Stop acting like a grade school child and address the subject at hand. Obama has tanked. What every President has done since Washington, has zero to do with that.
sockratties posted at 9:30 am on Wed, Mar 13, 2013.
From Ateam1:
{ 1) Rodini: Are you OK with Obama's Budget? He has done such an excellent job,Hasn't He? Printing press never cool's off!!! Care to Discuss?
2) there's no discussion with the liberals on this site. It's about Barack Obama! He is going to teach the old Rich MEN a Lesson in ECONOMIC'S! Him , Coming from Chicago, surely could do better than this. It's all coming out in the WASH! }
At1… you remind me of a little dog that runs in and takes a nip now and again when the big dogs are fighting. Have you ever tried having a thought of your own instead of just calling others names? You have yet to discuss anything.
VofReason posted at 12:26 pm on Wed, Mar 13, 2013.
Question, why doesn't the Obama Administration take the advise of it's own commision-Simpson Boles and reduce spending? Or they only reduce spending in ways that are meant to scare people- not in long term ways meant to change trajectory?
VofReason posted at 12:28 pm on Wed, Mar 13, 2013.
Or is is President Bush's or Reagan's fault that President Obama cannot listen to his own commision. Or better, the Republicans in Congress fualt for having no ideas? Sounds kind of silly when put that way- no?
Mike McClellan posted at 12:45 pm on Wed, Mar 13, 2013.
I agree, VofReason . . . Obama SHOULD take the Simpson-Bowles point of view and cut spending.
Of course, that same commission also called for more revenue.
Rich posted at 8:04 pm on Wed, Mar 13, 2013.
More revenue, more taxes, less of one, or the other. the answer is in proportions. The current out of balance proportion is government, producing less and in many cases nothing, versus private enterprise, currently over regulated and over taxed. Admittedly private enterprise created the problem with over production. Government needs to regulate less and Tax less then react to what shakes out. They are the last people with answers, fat and happy with the status quo, retiring from part time jobs with full time pensions. The answer is to do something, and react to what it teaches you, not defend mistakes to the Supreme Court.
Accuracy posted at 11:11 am on Thu, Mar 14, 2013.
Mike McClellan posted - for the first: "Obama SHOULD take the Simpson-Bowles point of view and cut spending."
With that said, the government has advertised for nearly 2,600 new jobs in just the last week-and-a-half. For more Obama spending?
Even yet to come this year will be three federal agencies to check out the qualifications, proof of identity and restrictions of many millions of applications for benefits under President Obama's health care plan. “Big Government” spending . . . because under ObamaCare, all Americans will be required to have some kind of health insurance – and all applications (questions) run 15 pages for family. The online version has 21 steps, some with additional questions.