REAGAN & OBAMA, TRUTH VS. PROPAGANDA
National Debt-to- GDP is often misreported, even by the CBO, but normally not as simple-minded as an opinion writer offered a few days ago. On November 8, 2017, a misguided person who has shown himself to be a sycophant for the left-wing propaganda network, and the simplest, often banal, teachings of the network, published an op-ed saying little except a fallacy that Reagan increased national debt 500% and that Obama prevented a depression. No proof via data and surely not with the 500% nonsense.
Here is my rebuttal. BTW, debt-to-GDP numbers are total debt, even that owed to Social Security, which of course, will never be repaid, and the so-called debt to ourselves at The Fed.
The letter, “Tax and Spend” vs “Borrow and Spend,” in the November 8 Virginia Gazette was not informative. Reagan did not have a 500% debt increase. Moreover, debt as percent of GDP is more definitive. Under Reagan, debt in 1980 of $0.9T, 32% of GDP rose to $2.6T, 49% of GDP, an increase of $1.7T. Fast-forward to Obama years.
Debt year-end 2008 was $10T, 67 % of GDP, in 2009 $12T, 83% of GDP and in 2016 $20T, 104% GDP. Both Reagan and Obama had two-fold increases, but Reagan's $1.7T does not equate with Obama's $10T. Increase of debt-to GDP was 17% under Reagan and 37% under Obama, who sought unlimited debt ceiling. Any debt is worrisome, but 32% GDP is manageable, 104% GDP is not! Debt won't be paid off and may be monetized, with disastrous dollar devaluation. What did we get for the debt.
Reagan presided over 94 months of average GDP growth of 3.6%. In the Obama years, monthly growth was barely 2%. Under Reagan, the USA pushed the Soviet Union to economic instability and won the cold war without a shot fired. The Soviets' condition was determined conclusively in the Reykjavik meetings, from which Reagan walked. I learned much firsthand directly from Donald Regan, then Chief of Staff to President Reagan. The economy mostly flourished through the '90s. I've published “The Economy Of The '90s” in detail. As the November 8 letter asserts, we have had two wars that have been the most mismanaged wars in history as said to me by a former Central Commander. While cost of wars is lamentable, war costs didn't collapse the economy or explode the debt since 2008.
The precursor to economic meltdown was the mandate by President Clinton, in 1994, that banks grant sub-prime mortgages to unqualified borrowers. Investment bankers bundled the mortgages and sold them as non-asset backed investment vehicles betting on rising variable interest rates to yield big returns. The economy flourished until borrower defaults collapsed the phony investments. Economic meltdown started in early 2008. President Barack Obama began his governance in 2009. He did, in fact, inherit a poor economy as Reagan did in 1980. But, while Reagan's outstanding economists focused on improving capital formation and job creation, as well as cost and productivity in consumer goods, Obama and his inept economists implemented Keynesian stimulus spending, always a failure historically. Even John Maynard Keynes didn't promote stimulus spending when deep in debt. In February 2009, Obama began Keynesian stimulus spending with one huge amount of $850B, most of which went to failing alternate energy companies. More of Keynesianism followed. Result? Anemic 2% GDP growth for eight years
Obama did not “clean up a mess,” as the writer wrote, and did not “prevent a depression” propaganda notwithstanding.
Joe Mann, James City County, VA