Saturday, March 26, 2016
Another Look At The Reagan Miracle
People like to tell a story about the Reagan miracle. Reagan cut taxes and the economy responded like a rising tide that raises all of the boats. Everyone benefited from the Reagan miracle. The graph in this article tells a different story. There was a V shaped recovery starting in 1979 from a deep recession. The Fed made a dramatic cut in interest rates and oil prices dropped from a high set by OPEC policies. That stimulated the economy. However, the graph shows that the rising tide did not lift all boats. The recovery was very good for those at the top but income for the bottom 99% did not budge much above the peak level in 1979.