Scumbria,
OT
We can ill afford a repeat of the 1980's.
1980s were the key to today's prosperity. The course in the US economy has been reversed 180 degrees. Instead of heading to stagnation, regulation, inflation (which in itself lead to higher taxation - since the tax brackets were not indexed), the course was reversed. I would like to give all the credit to Reagan, but we have to remember that Carter appointed Paul Volker.
Under Reagan watch, we had the most promising tax reform in 1986 (which was lead by Bill Bradley on the Democratic side), where most of the government tinkering in the economy through tax code was eliminated. The top marginal rate was reduced from 70% when Reagan was elected to 28%. This unleashed the creativity of the people into producing goods and services, instead of trying to escape taxes.
The free market reforms (and high dollar) exposed US firms to competition from abroad, which after some painfull restructuring transformed US companies into global powerhouses of productivity, creativity and profit.
At the time of the massive restructuring the experts on the left side (Lester Thurow - this guy was a media darling, unfortunately he was wrong about just about everything, Robert Reich - who was wrong about everything as well, but you have to give him credit for learning) told us that we should emulate the heaily regulated Japan and Germany rather than let the free market reign.
You can't forget that after 45 years of unsuccesful skirmishes of the Cold War we finally prevailed - no thanks to Jim Wright the Democratic speaker of the house - who thought the role of the opposition party was to help the enemy, or Christopher Dodd, senator of Connecticut, who never met a Commie they didn't like. (But you have to remember the loyal Cold Warrior Al Gore, Pat Moynihan etc., and of course Jimmy Carter again, who started the massive arms build-up, which Reagan continued)
The big 6 year run in the stock market began after two key events reversed the explosive growth of the national debt. The first was passage of Clinton's Deficit Reduction Act in September, 1993- which included a mix of tax hikes and budget cuts. The second was the large scale budget cuts by Congress in 1995.
Again, you ar missing the key event - as a price for breaking his "read my lips pledge", Bush senior got the Congress to agree to a strict budgetary discipline, which Congress abided by until recently.
It was the lack of discipline that caused the deficits in the first place. There is a danger that the same lack of discipline on part of the Congress is coming back.
Joe |
