Re: Finally back!
Reagan decreased taxes, and the deficit went up to unprecedented levels. He also increased taxes late in his term.<br />Clinton inherited a budget that was hopelessly out of balance, with Republicans clamoring for a balanced budget amendment (would that they would do that now!) raised some selective taxes, had the economy boom, nad reversed the deficits to surpluses in just a few short years.<br /><br />With W, in a few short months, we have lost 2 million jobs, independent economists predict in the next 6 months we will lose another half million jobs, and we have a budget escalating out of control with deficits.<br />Reagans economic situation was fundamentally different from the one we are in today. In Reagan's time, we had double digit interest rates, to control inflation, and money for investment was tight and difficult to get. Tax cuts for businesses and yes even the wealthy made some sense, to spur investment. Nowadays, we have a fundamental overcapacity problem, where the problem is not lack of investment, but lack of consumption. It is fundamentally different than what Reagan faced.<br />Interest rates are at all time lows, and even corporate junk bonds are going at like 6%. If a business needs money to expand, and has a decent business plan, it is available and cheap. No one will invest anything that has less than a 6% ROI ever. Capital money is not the problem, and a tax cut for the rich won't help anything at all. What we need is a significant tax cut for the middle class to spur consumption and utilizing unused capacity.<br />The problem is the middle class did not spend mega bucks getting Bush elected, so they are being left out...<br />And this is not class warfare. It is economic reality.