02 July 2013

Where Are Reagan's Big Government Policies When We Need Them?

Here's a remarkable chart that contrasts reality with myth. Ronald Reagan supposedly unleashed the American economy by championing a smaller government. By contrast, Barack Obama slowed down the economy by making us more dependent on government. This chart suggests that those claims would fall into the category of urban myths. Here, from the Atlantic, is a chart that compares the rise in spending during the recession that played out during the early 1980s and our more recent recession. Under Reagan, government spending rose more than 21%. Under Obama, by contrast, it has actually dropped by more than 6%. 

Not only has the origin of our current recession been different than the one in the 1980s (that one Paul Volcker engineered to bring down inflation) but we've had to continually struggle uphill against a steady erosion in government spending, government employees laid off into a weak job market. Austerity measures have been one significant reason that, as Matthew O'Brien writes, "Even now, there are three unemployed people for every job opening -- worse than it ever was after the tech bubble burst."

Reagan would have never put up with such poor jobs numbers in pursuit of ideology. House Republicans are a little bit like Medieval Christians - using the name of their role model to do things he never would have done. 

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