Reagan-omics or Obama-nomics | IT DOESN'T MATTER - You're still losing your job!
CORRECTING SOME TYPOS: I don't generally like talking politics - but it appears to be the topic dejur right now so I'll chime in quickly.
REGARDING THE CURRENT BIG ISSUES OF THE DAY:
Politics and policy are not as big a determinent of economic prosperity as money supply and government balance sheets.
What I mean by this is that policy changes have their limitations in this current environment.
The U.S. had a decent balance sheet (not great) at the time of Reagan so we could afford to lever up and spend to grow the economy. But what do we do now that the U.S. balance sheet is insolvent?THE CATCH 22
1. If the U.S. tries to spend our way out of this with government bailouts and subsidies: our debt will carry such substantial interest that our tax revenues will barely cover our interest payments - leaving very little left to pay for day to day operations of the governement.
2.If the U.S.Government doesn't share the private / free market's losses and broken balance sheets, then the deflationary spiral will continue as the money supply shrinks and the financial system implodes.
See my post here for proof that the financial system will definitely
The only reason the U.S. is not bankrupt is that we can print money - unlike other entities like a corporation or state - who would be bankrupt with this balance sheet and this paltry level of operating income (income statement).
A FEW PROBLEMS WITH REAGANOMICS:
I laugh at all the conversations about tax cuts for the wealthy. What a side show... with or wtih out them we're still pretty much so screwed.
Even President Reagan, himself, couldn't fix this mess.
Make no mistake that Ronald Reagan was a very effective president when it comes to popularity and being, well, presidential.
Reagon wasn't a god though. The truth is he was a president who spent America out of problems.
WE CAN'T SPEND OUR WAY OUT OF THIS MESS NOW.
Hopefully I've not gone too far. Hopefully even Regan lovers will agree that deficit ballooned under Reagan's watch - these deficits funded subsidies for the private sector.
Building up a huge government deficit or socializing the costs on behalf of private sector profits isn't a hallmark of unfettered capitalism. That was well intentioned socialism. The profits went to the private sector and the debt went to the public U.S. balance sheet.
Historians have done a poor job of recognizing Reagan's work for welfare program.
CALLING OUT THE TAX PAYERS MOCK OUTRAGE
Americans outrage over the current account deficit and government waste is often captured by the popular statement: "Us tax payers got stock with the bill".
The truth is that the American tax payer has not been paying the bill. If Taxpayers had been paying for our wreckless government spending we wouldn't have a current account deficit. The U.S. would have no debt at all.
THE TRUTH IS THAT FOREIGNERS SUBSIDIZE THE AMERICAN WAY OF LIFE.
Countries like China, Russia, Saudi Arabia, and Japan all subsidize the American way of life - in fact we couldn't have even fought the Iraq war without funding from many of the nations who supposedly opposed the war.