Perhaps Reagan was chosen because he was also president during a major recession. But I've always thought we needed to be clear about the fact that a recession based on oil shortages (which was the case in the 1980's) is very different from a recession based on a collapse of the financial markets - which is what President Obama inherited. The only other time our country has faced the latter, we suffered the Great Depression. But be that as it may.
Hartung uses data on job creation, economic growth and investment to make his case. For example, at this point in Reagan's presidency, the unemployment rate was 7.1%. It wouldn't get to the mid-low 6% range (where it is now under Obama) for another year. I won't copy and paste all the rest - you can click the link and see the charts. But along the way, he includes some things I've never seen mentioned before.
- Reagan had the benefit of a growing Boomer class to ignite economic growth, while Obama has been forced to deal with a retiring workforce developing special needs,
- Obama reduced the debt, while it skyrocketed under Reagan,
- Obama reduced federal employment, which grew under Reagan,
- Obama kept inflation low - even as European economies bordered on failure.
WOW! Put all that together and President Obama's performance really is quite amazing. All that's left is to wonder why no one but Hartung seems to be noticing.
Obama reduced the debt, while it skyrocketed under Reagan
ReplyDeleteThat is 100% incorrect. The rate of accumulation of new debt is slower than it was during the recession. Since the government still runs deficits every year, that means the net debt continues to grow in real amounts and for now also on a per capita or %gdp basis. It is also projected that future debt will only grow with gdp and remain relatively constant as a percent for the next decade, barring economic disruptions.
Reducing a deficit or reducing expected future health care spending =/= reducing debt. You really can't afford to lie even one time, or people will take it as an excuse to dismiss the whole argument. That Forbes guy should know better.
(Of course, the whole premise is absurd to consider only two presidencies and ignore the 90s altogether...)
Obama has reduced the debt as a percentage of GDP. Within that frame, Hartung is correct.
Deletehttp://research.stlouisfed.org/fred2/series/GFDEGDQ188S
DeleteFalse. Public debt has plateaued at ~100% of gdp. These are easy stats to look up. It's completely nonsensical to suggest that debt has been declining even on a relative basis unless you only start counting from like the last fiscal quarter.
According to CBO, debt is 74% of GDP.and is projected to fall over the next few years.
DeleteThank you for accurate and insightful basis for concluding that President Obama has already led us to an amazing set of ongoing achievements. Reagan achieved the appearance of prosperity by relieving Big Finance/Credit card companies of usury laws and consumer protection safeguards, and millions went into private debt to buy consumer goods. Decades later, the goods are gone, but the debt remains. At the same time, Reagan increased Public Debt -- billions spent on Star Wars, and Bradley, neither of which worked. Reagean's budget director Stockman also admitted that to cover up the vast loss of Revenue from slashing the tax burden for the top 10%, the GOP shifted Social Security from its own account to General Revenue.
DeleteThere is little to compare between Reagan and Obama. One President destroyed our nation without any enemy attack or domestic opposition, and we are still paying for the neglected infrastructure and debt. Reagan also increased the size (personnel and budget) of the federal government, relieving the labor market.
President Obama has faced further reductions of the Federal personnel and budget, forced by anti-Keynesian GOP, which has delayed our recovery. He is boosting morale, health, and wages, while dramatically reducing both public and private debt. Credit cards once again are subject to consumer protection, disclosure, and regulatory recourse. Remarkable achievements.
I can't believe Forbes actually ran that. They hate everything about him. Except maybe no major wars.
ReplyDeleteThey actually wrote this:
ReplyDelete"Simultaneously the current administration has reduced the debt, which skyrocketed under Reagan."
which I do not understand. Surely, the deficit has plummeted compared to the last year of the Bush administration, but for the debt to shrink you need surpluses (like in Clinton's final year).
But perhaps they mean debt-as-a-percentage-of-GDP. I do not have those numbers handy.
They probably meant deficit. People, even supposed experts, use the terms interchangeably.
DeleteNope. Economics writers at places like Forges don't make the mistake of using those 2 terms interchangeably. He meant debt - which is pretty universally discussed as a % of GDP rather than a raw number.
DeleteI understand what you are saying, but you quoted the article as saying "Obama reduced the debt" (past tense). Thee CBO only estimates a decrease in the future. It as currently plateaued at 74% public debt and 100% total debt. They either made a mistake, meant will reduce, or meant deficit. Take you pick.
DeleteMost people don't notice it because the high stock market and corporate profits do not trickle down to the average person.
ReplyDeleteMost average people have some stake in the stock market due to pensions and 401(k)'s. Also, he includes job creation - which is being felt by most folks right now. The one thing that isn't improving is wages (which this author didn't discuss). That's why raising the minimum wage is issue #1 for Dems.
Deletethis President's performance has been amazing. Just think what would have happened if you didn't have one political party that decided to commit ECONOMIC TREASON against this country beginning January 20, 2009?
ReplyDelete