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**astralis** · 03-19-2007, 15:52 PM

gunnut,

i don't think that was FDR. we ran up plenty of deficit during the depression years and WWII (this in particular), but the massive employment gained through the use of government spending more than off-set the financial costs of the deficit.

however, in the case of reagan and bush, this deficit spending did not produce a similar economic gain, simply because 1. there wasn't that much economic "slack" to soak up, 2. gains in our economy are increasingly coming from efficiency, produced by technological growth. bush probably would have done better for the economy had he geared the tax cuts for technology sectors, or better yet, a combination of tax cuts and funding for high-technology research (which, to his credit, the latter of which he has done, but IMO not enough).

reagan's best move when it came to domestic policy was paul volcker, and sticking by that guy while he killed inflation. when it came to following reagan's own mantra of reversing government growth, though, that never happened on reagan's watch. at best, reagan slowed down the rate of growth by a small amount...for a few years...and then the rate of growth went right back up afterwards.

03-19-2007, 15:52 PM	#25 (permalink)
astralis *Foreign Service* Moderator Lei Feng Protege Join Date: 08-23-05 Location: Washington, DC Posts: 3,235 Country:	gunnut, i don't think that was FDR. we ran up plenty of deficit during the depression years and WWII (this in particular), but the massive employment gained through the use of government spending more than off-set the financial costs of the deficit. however, in the case of reagan and bush, this deficit spending did not produce a similar economic gain, simply because 1. there wasn't that much economic "slack" to soak up, 2. gains in our economy are increasingly coming from efficiency, produced by technological growth. bush probably would have done better for the economy had he geared the tax cuts for technology sectors, or better yet, a combination of tax cuts and funding for high-technology research (which, to his credit, the latter of which he has done, but IMO not enough). reagan's best move when it came to domestic policy was paul volcker, and sticking by that guy while he killed inflation. when it came to following reagan's own mantra of reversing government growth, though, that never happened on reagan's watch. at best, reagan slowed down the rate of growth by a small amount...for a few years...and then the rate of growth went right back up afterwards. __________________ Never let the future disturb you. You will meet it, if you have to, with the same weapons of reason which today arm you against the present. -Marcus Aurelius, Meditations Last edited by astralis : 03-19-2007 at 15:54 PM.