How does Obama's stimulus package compare to what Reagan did when he became President?

Just want to know more. I'm not very familiar with the details of what Reagan did to help the economy after first becoming President. In a nutshell, what did Reagan do to stimulate the economy? How does it compare to what Obama is trying to do now?|||What do you do when you want to screw only the working people of your nation with the largest tax increase in history and hand those trillions of dollars to your wealthy campaign contributors, yet not have anybody realize you've done it? If you're Ronald Reagan, you call in Alan Greenspan. Through the "golden years of the American middle class" - the 1940s through 1982 - the top income tax rate for the hyper-rich had been between 90 and 70 percent. Ronald Reagan wanted to cut that rate dramatically, to help out his political patrons. He did this with a massive tax cut in the summer of 1981. The only problem was that when Reagan took his meat axe to our tax code, he produced mind-boggling budget deficits. Voodoo economics didn't work out as planned, and even after borrowing so much money that this year we'll pay over $100 billion just in interest on the money Reagan borrowed to make the economy look good in the 1980s, Reagan couldn't come up with the revenues he needed to run the government. Coincidentally, the actuaries at the Social Security Administration were beginning to get worried about the Baby Boomer generation, who would begin retiring in big numbers in fifty years or so. They were a "rabbit going through the python" bulge that would require a few trillion more dollars than Social Security could easily collect during the same 20 year or so period of their retirement. We needed, the actuaries said, to tax more heavily those very persons who would eventually retire, so instead of using current workers' money to pay for the Boomer's Social Security payments in 2020, the Boomers themselves would have pre-paid for their own retirement. Reagan got Daniel Patrick Moynihan and Alan Greenspan together to form a commission on Social Security reform, along with a few other politicians and economists, and they recommend a near-doubling of the Social Security tax on the then-working Boomers. That tax created - for the first time in history - a giant savings account that Social Security could use to pay for the Boomers' retirement. This was a huge change. Prior to this, Social Security had always paid for today's retirees with income from today's workers (it still is today). The Boomers were the first generation that would pay Social Security taxes both to fund current retirees and save up enough money to pay for their own retirement. And, after the Boomers were all retired and the savings account - called the "Social Security Trust Fund" - was all spent, the rabbit would have finished its journey through the python and Social Security could go back to a "pay as you go" taxing system. Thus, within the period of a few short years, Reagan dramatically dropped the income tax on America's most wealthy by more than half, and roughly doubled the Social Security tax on people earning $30,000 or less. It was, simultaneously, the largest income tax cut in America's history (almost entirely for the very wealthy), and the most massive tax increase in the history of the nation (which entirely hit working-class people). But Reagan still had a problem. His tax cuts for the wealthy - even when moderated by subsequent tax increases - weren't generating enough money to invest properly in America's infrastructure, schools, police and fire departments, and military. The country was facing bankruptcy. No problem, suggested Greenspan. Just borrow the Boomer's savings account - the money in the Social Security Trust Fund - and, because you're borrowing "government money" to fund "government expenditures," you don't have to list it as part of the deficit. Much of the deficit will magically seem to disappear, and nobody will know what you did for another 50 years when the Boomers begin to retire 2015. Reagan jumped at the opportunity. As did George H. W. Bush. As did Bill Clinton (although Al Gore argued strongly that Social Security funds should not be raided, but, instead, put in a "lock box"). And so did George W. Bush. The result is that all that money - trillions of dollars - that has been taxed out of working Boomers (the ceiling has risen from the tax being on your first $30,000 of income to the first $90,000 today) has been borrowed and spent. What are left behind are a special form of IOUs - an unique form of Treasury debt instruments similar (but not identical) to those the government issues to borrow money from China today to fund George W. Bush's most recent tax cuts for billionaires (George Junior is still also "borrowing" from the Social Security Trust Fund). Former Bush Junior Treasury Secretary Paul O'Neill recounts how Dick Cheney famously said, "Reagan proved deficits don't matter." Cheney was either ignorant or being disingenuous - it would be more accurate to say, "Reagan proved that deficits don't matter if you rip off the Social Security Trust Fund to pay for them, and don't report that borrowing from the Boomers as part of the deficit."|||Don B, the response you gave is not only ridiculous but horribly wrong. If you actually look at the facts and revenue gained by the IRS in the 1980's, you would see that a tax decrease increased revenues. Carter was the problem and we have an even worse Carter in office now.

Report Abuse

|||Why is it always wrong to reduce the burden on the wealthy? Who deigns that they somehow do not deserve their gains? They provide jobs and income and to reduce their burden is to unleash their ability to create more jobs. Capitalism works if left alone.

Report Abuse

|||Reagan's plan worked...





He reversed the Carter/Democrat congress's trends...Unemployment went down, taxes went down and revenue to the Federal Govt.went up...The Dems still managed to outspend the windfall...But Reagan/Bush HANDED Clinton a great economy and Clinton handed W an economy in decline...|||Reagan ran up a huge deficit. His trillion dollar "Star Wars Defense plan" was unprecedented at the time.





Stimulus packages such as these bailouts aren't anything new, but they certainly weren't as massive.





Chrysler needed to be bailed out at one time.|||Reagan basically dropped taxes to increase the ecnomy...but at the same time he had to borrow more money...NOT print more but borrow from foreign countries and private investors...this worked but we have now borrowed to the point that we can't borrow anymore.





and yes under Reagan we increased spending.|||What is more important is that it is very similar to what Hoover and FDR did, turning a recession into a depression.|||Reagan turned the US from a creditor nation to a debtor nation:





The 1979 appointment of Wall Street banker Paul Volcker as chairman of the Federal Reserve Board by Democrat Jimmy Carter was a major turning point. It signaled a decision by the American bourgeoisie to defend its wealth and its international position by launching an offensive against the American working class. It marked the definitive end of the policies of relative class compromise and social reform that had been initiated under the New Deal. The central aim was to roll back the economic and social gains that had been achieved by the working class over the previous 40 years. This was to be achieved by shutting down major sections of US industry that could no longer provide a sufficiently high rate of profit and using mass unemployment as a weapon to attack the unions and break the militant resistance of the working class. The "Volcker shock," involving the raising of interest rates to more than 20 percent, was used to precipitate the deepest recession and highest jobless rates since the 1930s.





What BusinessWeek at the time dubbed the "deindustrialization of America" marked a decisive shift of American capital from productive forms of investment to purely speculative forms of wealth accumulation. It is highly noteworthy that the previous bourgeois offensive against the American working class that began after World War I and lasted into the first years of the Depression coincided with a continued expansion of US industry. That was during the rising arc of American capitalism. The new offensive took place within the context of an accelerating decline, and in the critical respect of America's industrial base took the opposite form.





The Reagan administration intensified both the assault on the working class and the turn to financial speculation. Reagan's firing of 13,000 PATCO air traffic controllers in August of 1981 was the signal for a wave of corporate union-busting and wage-cutting in every sector of the economy. This was accompanied by sweeping cuts in social spending and the gutting of legal restraints on corporate profit-making, including the weakening or lifting of banking regulations.





The decade of the 1980s saw the elimination of 10 million jobs, on the one side, and an explosion of new forms of financial speculation on the other. There was a marked increase in leveraged corporate buyouts. The phenomenon of junk bonds emerged, along with the beginnings of securitization, in which various forms of debt, including mortgage debt, were packaged as bonds and sold to banks, brokerage houses, pension funds, insurance companies and other big investors. The stock market assumed an ever more central role in determining the investment policies of corporations and banks, demanding immediate and high returns at the expense of research and development and long-term planning. The result was an ever-greater accumulation of paper values and debt, which provided the basis for the enrichment of the uppermost social layers at the expense of the vast majority of the population. To cite one statistic: In 1970, wages and salaries comprised 75.4 percent of national income. By 1986, that figure had fallen to 61 percent. The narrowing of economic disparities that had been under way for several decades was reversed.





All of this was given legitimacy by the media and academia, which hailed the emergence of the "post-industrial society" and the "Reagan Revolution." In reality, the 1980s saw a catastrophic decay in the foundations of American capitalism. Between 1981 and 1986, the US share of world exports slumped from over 20 percent to 13.8 percent. Between 1973 and 1983, US steel production fell 44 percent. The national debt more than doubled under the Reagan administration.





In October of 1987 Wall Street suffered its greatest ever single-day crash in percentage terms, as equities lost 23 percent of their value. The decade ended with the savings and loans collapse, in which more than 1,000 institutions failed and the government organized a bailout costing $160 billion. The sharp decline in the global position of American capitalism was summed up in the transformation of the US in the 1980s from a creditor nation, a status it had maintained since the end of World War I, to a net debtor.|||He turned us into a nation of debtors.





BOTH PARTIES have continued the trend.





Now it's time to reap the "rewards"..........can you say financial meltdown??|||reagans was better than obamas because the economy did not have this situation.|||Reagan CUT TAXES and SPENDING|||Tax cuts.|||Ronald Wilson Reagan (February 6, 1911 – June 5, 2004) was the 40th President of the United States (1981–1989) and the 33rd Governor of California (1967–1975). Born in Illinois, Reagan moved to Los Angeles, California in the 1930s, where he was an actor, president of the Screen Actors Guild (SAG), and a spokesman for General Electric (GE). His start in politics occurred during his work for GE. Originally a member of the Democratic Party, he switched to the Republican Party in 1962, at the age of 51. After delivering a rousing speech in support of Barry Goldwater's presidential candidacy in 1964, he was persuaded to seek the California governorship, winning two years later and again in 1970. He was defeated in his run for the Republican presidential nomination in 1968 as well as 1976, but won both the nomination and election in 1980.





As president, Reagan implemented bold new political and economic initiatives. His supply-side economic policies, dubbed "Reaganomics," included deregulation and substantial tax cuts implemented in 1981. In his first term he survived an assassination attempt, took a hard line against organized labor, and ordered military actions in Grenada. He was reelected in a landslide in 1984. His second term was primarily marked by foreign matters, namely the ending of the Cold War, the bombing of Libya, and the revelation of the Iran-Contra affair. The president had previously ordered a massive military buildup in an arms race with the Soviet Union, forgoing the strategy of détente. He publicly described the USSR as an "evil empire" and supported anti-Communist movements worldwide. He negotiated with Soviet General Secretary Mikhail Gorbachev, resulting in the INF Treaty and the decrease of both countries' nuclear arsenals.





Reagan left office in 1989. In 1994, the former president disclosed that he had been diagnosed with Alzheimer's disease earlier in the year; he died ten years later at the age of ninety-three. He ranks highly among former U.S. presidents in terms of approval rating.








Ronald Reagan was a rockstar...Obama isn't even on the same planet.