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To: bentway who wrote (26520)	1/13/2005 6:02:01 PM
From: Elroy Jetson	Respond to of 306849

The record does show that Reagan/Bush "economic stimulus" was just various methods to leverage the economy and increase debt. Useful for creating financial bubbles but little else. History clearly demonstrates how poorly this turned out home.pacbell.net Using debt to grow your way out of debt -- Voodoo economics indeed. .

To: bentway who wrote (26520)	1/16/2005 11:58:06 PM
From: JF Quinnelly	Read Replies (2) \| Respond to of 306849

You left off the Republican's magic, voodoo economic solution, use "economic stimulus" (debt) to "grow your way out of debt"! That may well be Dubya's policy, but it never was Reagan's. Reagan's economists complained about "the myth of the supply siders", which attributed to them a policy they didn't advocate. The Reagan era deficits were a combination of an unexpectedly dramatic decline in the inflation rate, which resulted in lower than projected nominal tax receipts, and Tip O'Neil reneging on budget cuts he had agreed to move through Congress. The rapid fall in inflation was the larger factor. Taxes were raised in 1982 to address the ballooning deficit. Lawrence Lindsey attempted to measure the impact of the Reagan tax rate cuts when he was at Harvard. The only rate cut that conceivably "paid for itself" was the capital gains rate cut- and that cut was made by the Carter Administration. The Reagan cuts stimulated economic growth, which recouped some of the money lost to the Treasury due to the lower rates, but the cuts didn't pay for themselves. Growth recouped some 65% of "lost revenue". A 35% reduction in spending for each dollar cut could have balanced the budget.