Reaganomics - Wikipedia, the free encyclopedia

08 May 14

Janet Frazer

"Results
Overview
Real wages fell following the 1970s recession.[25]

Spending during Reagan's two terms (FY 1981–88) averaged 22.4% GDP, well above the 20.6% GDP average from 1971 to 2009. In addition, the public debt rose from 26% GDP in 1980 to 41% GDP by 1988. In dollar terms, the public debt rose from $712 billion in 1980 to $2.052 trillion in 1988, a roughly three-fold increase.[4] The unemployment rate rose from 7% in 1980 to 10.8% in 1982, then declined to 5.4% in 1988. The inflation rate declined from 10% in 1980 to 4% in 1988.[2]

Some economists have stated that Reagan's policies were an important part of bringing about the second longest peacetime economic expansion in U.S. history.[26][27] Though other economists argue the longer 1990s expansion begun under George H.W. Bush in 1991 occurred after an increase in tax rates by Congress in November 1990, continuing through the Clinton administration, resulting in a 42% decrease in unemployment. [28] During the Reagan administration, the American economy went from a GDP growth of -0.3% in 1980 to 4.1% in 1988 (in constant 2005 dollars), averaging 7.91% annual growth in current dollars. [29] This reduced the unemployment rate by 1.6%, from 7.1% in 1980 to 5.5% in 1988. [28][30] A net job increase of about 21 million also occurred through mid-1990. Reagan's administration is the only one not to have raised the minimum wage. [31] The inflation rate, 13.5% in 1980, fell to 4.1% in 1988, which was achieved by applying high interest rates by the Federal Reserve (peaking at 20% in June 1981). [32] The latter contributed to a relatively brief recession in 1982 where unemployment rose to 9.7% and GDP fell by 1.9%.

The misery index, defined as the inflation rate added to the unemployment rate, shrunk from 19.33 when he began his administration to 9.72 when he left, the greatest improvement record for a President since Harry S. Truman left office.[33] In terms of American households, the percentage of total households making less than $10,000 a year (in real 2007 dollars) shrunk from 8.8% in 1980 to 8.3% in 1988 while the percentage of households making over $75,000 went from 20.2% to 25.7% during that period, both signs of progress.[34]
Unemployment rates

The job growth under the Reagan administration was an average of 2.1% per year, with unemployment averaging 7.5%. The unemployment averaged 6.4 percent under President Carter and 7.8 percent under President Ford.[35] Towards the end of his second term however the unemployment rate dropped to 5.4%.
Growth rates

Comparing the recovery from the 1981–82 recession (1983–1990) with the years between 1971 (end of a recession) through 1980 shows that the rate of growth of real GDP per capita averaged 3.05% under Reagan versus 2.14% under Carter.[36] Following the recession, the unemployment rate had averaged slightly higher (6.75% vs. 6.35%), productivity growth lower (1.38% vs. 1.92%), and private investment as a percentage of GDP slightly less (16.08% vs. 16.86%). Real wages were lower following the recession, while real median family income grew by $4,000 during the Reagan period.[37][38] But, using U.S. Bureau of Economic Analysis data, real U.S. GDP in 2009 chained dollars divided by the U.S. population, shows that real per capita GDP went from $26,196.55 in the 4th quarter of 1976 to $28,447.21 4th quarter of 1980, a real increase of 8.6% during President Carter’s four years. President Reagan’s eight years in office saw per capita GDP grow another 23.4% to $35,097.83.[39]
Inflation

Comparing the recovery from the 1981–82 recession (1983–1990) with the years between 1971 (end of a recession) through 1980 shows that the rate of growth of real GDP per capita averaged 3.05% under Reagan versus 2.14% under Carter.[37][40]
Poverty level
The distribution of net wealth in the United States, 2007. The chart is divided into the top 20% (blue), upper middle 20% (orange), middle 20% (red), and bottom 40% (green). (The net wealth of many people in the lowest 20% is negative because of debt.)[41]

During the period 1980–1988, the percentage of the total population below the poverty level ranged from a low of 13.0% in 1980 and 1988 to a high of 15.2% in 1983, yet dropped 1.2% during his administration and dropped 3.3% from their high in 1983 to their low in 1988.[42] During Reagan's first term, critics pointed to homelessness as a visible problem in America's urban centers.[43] In the closing weeks of his presidency, Reagan told The New York Times that the homeless "make it their own choice for staying out there".[44] His policies became widely known as "Trickle-down economics", due to the significant cuts in the upper tax brackets.[45] Supporters pointed to the drop in poverty by the end of his term to validate that the tax cuts did indeed trickle down to the poor; opponents noted that the rate quickly shot up even higher in the first year of his successor's term, implying that the full effect of Reagan's policies led to a net increase in poverty.[42]"

12 Mar 13

Jaz Liao

commonly associated with supply-side economics
four pillars
According to a 1996 study by William A. Niskanen and Stephen Moore:^[34] On 8 of the 10 key economic variables examined, the American economy performed better during the Reagan years than during the pre- and post-Reagan years
Milton Friedman stated, "Reaganomics had four simple principles: Lower marginal tax rates, less regulation, restrained government spending, noninflationary monetary policy. Though Reagan did not achieve all of his goals, he made good progress.
Economist Paul Krugman argued the economic expansion during the Reagan administration was primarily the result of the business cycle and the monetary policy by Paul Volcker.^[58] Krugman argues that there was nothing unusual about the economy under Reagan because unemployment was reducing from a high peak and that it is consistent with Keynesian economics for the economy to grow as employment increases if inflation remains low.^[59]

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22 Aug 12

tara murakami

economy election taxes reagen

With the Tax Reform Act of 1986, Reagan and Congress sought to raise taxes on lower incomes, eliminate many deductions, and reduce tax rates on the wealthy.
bipartisan 1986 act aimed to be revenue-neutral
President Ronald Reagan's 1981 cut in the top regular tax rate on unearned income reduced the maximum capital gains rate to only 20%—its lowest level since the Hoover administration.
Reagan significantly increased public expenditures, primarily the Department of Defense, which rose (in constant 2000 dollars) from $267.1 billion in 1980 (4.9% of GDP and 22.7% of public expenditure) to $393.1 billion in 1988 (5.8% of GDP and 27.3% of public expenditure)
As a short-run strategy to reduce inflation and lower nominal interest rates, the U.S. borrowed both domestically and abroad to cover the Federal budget deficits, raising the national debt from $997 billion to $2.85 trillion.^[16] This led to the U.S. moving from the world's largest international creditor to the world's largest debtor nation.^[17] Reagan described the new debt as the "greatest disappointment" of his presidency.^[18]
the top marginal individual income tax rate fell from 70.1% to 28.4%
President Reagan, has remained popular as an antitax hero despite raising taxes eleven times over the course of his presidency,
Spending during Reagan's two terms (FY 1981–88) averaged 22.4% GDP, well above the 20.6% GDP average from 1971 to 2009.
In addition, the public debt rose from 26% GDP in 1980 to 41% GDP by 1988.
During the Reagan administration, the American economy went from a GDP growth of -0.3% in 1980 to 4.1% in 1988 (in constant 2005 dollars),^[27] which reduced the unemployment rate by 1.6%,
The job growth under the Reagan administration was an average of 2.1% per year, with unemployment averaging 7.5%. The unemployment averaged 6.4 percent under President Carter and 7.8 percent under President Ford.^[31]
growth of real GDP per capita averaged 2.77 under Reagan and 2.50% under Nixon, Ford and Carter.
population below the poverty level ranged from a low of 13.0% in 1980 and 1988 to a high of 15.2% in 1983.^[
critics pointed to homelessness as a visible problem
During the Reagan administration, federal receipts grew from $618 billion to $991 billion (an increase of 60%); while outlays grew from $ 746 billion to $1144 billion (an increase of 53%).^[39]^[40]
The nominal national debt rose from $900 billion to $2.8 trillion during Reagan's tenure, an average national budget deficit per year of $237.5 billion, as compared to an average national budget deficit per year of $56,9 billion during Carter's tenure.

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deacondon

reaganomicis

02 Jul 12

Stephen Parker

In 1981, Reagan significantly reduced the maximum tax rate, which affected the highest income earners, and lowered the top marginal tax rate from 70% to 50%; in 1986 he further reduced the rate to 28%
raising the national debt from $997 billion to $2.85 trillion.^[

21 Apr 12

fernando_olivi

15 Jan 12

arsskeptica

17 Jul 11

Joe Pompeo

wikipedia reaganomics

13 Dec 10

Sean ross

20 Nov 10

McKay Whisenhunt III

06 Nov 10

bobbycather

In order to cover new federal budget deficits, the United States borrowed heavily both domestically and abroad, raising the national debt from $700 billion to $3 trillion,^[18] and the United States moved from being the world's largest international creditor to the world's largest debtor nation.^[19] Reagan described the new debt as the "greatest disappointment" of his presidency.^[18]

The number of Americans below the poverty level increased from 29.272 million in 1980 to 31.745 million in 1988, which means that, as a percentage of the total population, it remained almost stationary, from 12.95% in 1980 to 13% in 1988.^[20] The poverty level for people under the age of 18 increased from 11.543 million in 1980 (18.3% of all child population) to 12.455 (19.5%) in 1988.^[21] In addition, the situation of low income groups was affected by the reduction of social spending. Inequality also increased. The share of total income going to the 5% highest-income households grew from 16.5% in 1980 to 18.3% in 1988 and the share of the highest fifth increased from 44.1% to 46.3% in same years. In contrast, the share of total income of the lowest fifth fell from 4.2% in 1980 to 3.8% in 1988 and the second poorest fifth from 10.2% to 9.6%.^[22]