"Reagan inherited an economy with similar problems to that inherited by Obama. But by the third year, things were really simmering along and the GDP was growing at a very quick pace!
Reagan's economic policies and tax cuts were therefore better than those of Obama."
I've heard and read this in many places this winter.
Well...not so fast....
Well...not so fast....
The Truth About Reagan and Carter and the 1981 recession
I read the following yesterday posted as a comment at the Huffington Post. Let's debunk this fact by fact:
1. "Ronald Reagan "inherited
" a very similar (to the current) economic downturn from Jimmy Carter in 1981."
2. "Three years into Reagan's presidency his economic policies created over 6.3 MILLION jobs, reduced unemployment from double digits to 7%....Reagan created over 6 million jobs at the same point in his presidency as Obama is now."
3. GDP growth was booming near 6% ...
4. (Reagan did this) WITHOUT spending TRILLIONS in taxpayer money.
5. Reagan CUT taxes and the booming economy and the millions more people in the workforce with jobs actually INCREASED federal income tax revenue!!"
I think we need a few facts here:
- The recession in 1981 was a Reagan recession. He inherited a DECLINING unemployment rate from Carter, a DECLINING inflation rate, and an INCREASING number of jobs. Carter's one term was the TOP one term for any modern Prez in % of job growth.
- Unemployment was NOT double digits when Reagan took office. In January 1981, unemployment was 7.5%. The highest unemployment rate under Carter was 7.8% in the summer of 1980. Reagan's policies (those severe tax CUTS) got the unemployment rate climbing, and it went up to 10.8% in Fall 1982. When Reagan's budget director realized that the economy was in trouble (Hmm- maybe those tax CUTS were extreme?), Reagan was willing, with the help of a CO-OPERATIVE DEMOCRATIC House of Representatives, to roll back some tax cuts--- and within half a year, the unemployment rate started dropping and the economy was rolling again.
- Reagan had NOT created over 6 million jobs by the same point in his presidency as Obama's current point (January 2012 vs. January 1984). There were 91,030,000 jobs when Reagan took office from Carter in January 1981. (This was a new high in the United States.) Jobs increased for five months after Reagan was elected and then started to decline. Jobs were down to 88,770,000 in late 1982. When taxes were increased in late 1982, jobs started to come back. In January 1984, (same time frame as now), there were 92,657,000 jobs, an increase of 1,627,000 from the time Reagan took office. From the "trough" of the 1981-2 recession, the increase was 3,887,000. Remember Reagan inherited a declining unemployment rate and an increasing number of jobs.
Remember: Reagan was working with a DEMOCRATIC House in Congress. They could have played obstructionist games as the Reagan administration was on the ropes in late 1982, but it appears that they cared more about the American people than about getting the Republican out of the White House. However, the current obstructionist Republican Congress will do anything, including prolonging the misery of the American people, to get Obama out of office. (Click on that link if you haven't heard about the Inauguration 2008 night meeting of Republicans who were busy plotting to keep you in misery.. just to recapture the White House.)