Now I'm doing Ryan's work for him...

I'm so tired of having to say the same things over and over, that it dawned on me this morning that I can't make my case better by using Ryan's analogies and comparisons to prove MY point instead of trying to show him my data from the Great Depression.

Unless I am completely lost, Ryan is saying that FDR's methods of curing the ills and failings of the economy in 1933 are the polar opposite to what Reagan did in his first years in office to fix the "malaise" that the country and economy was suffering from under Carter. I feel this is incorrect, and that there are many similarities between the two methods. I am NOT saying FDR was a conservative, or that Reagan was a progressive... they were not. What they both were, though, was proponents of similar economic theories about how to cure an ailing economy.

Furthermore, Reagan's plans show similar slip-ups and impediments to what was encountered in the 30s, and this should show that either A) there are economic factors involved that we are not taking into account in our analysis of their performance, or B) neither was the visionary that many claim them to be and both are, instead, simply "labels" for economic transitions that occurred randomly and without prompt from either administrative method. Since I don't think it is B, it must be A.

In Reagan's first year in office, the nation saw the unemployment rate drop from 16% to 9.8%... more than a 1/3 reduction... and the rate of growth went up to 3.5% and interest rates dropped by nearly half. He was delivering on his promise of prosperity and security by cutting income taxes from a top rate of 78% to 28%, and a 50% reduction in capital gains... while increasing defense and infrastructure budgets and spending.

Then he passed the Tax Equity and Fiscal Responsibility Act of 1982, which was a "compromise" bill with the Democratic-controlled Congress which equated to the largest tax INCREASE since WWII by doubling the corporate tax rate to increase revenue and reduce the deficit. This increase not only slowed the recovery and growth cycle, but began what historians now call the Reagan Recession of '82. Nine months of increasing unemployment, a lower GDP, and a higher rate of inflation than we had seen since Johnson's terms. Personal income taxes stayed low, but corporate taxes and SS/Medicare withholding went way higher, and nearly negated the gains made in the previous four quarters... and the deficit was climbing all the while.

The parallels here are so obvious that I can't believe you don't see them! In May of 1982, the US economy wasn't ready for the return to a more fiscally "conservative" model... the deficit spending coupled with the lower taxes was WORKING, but hadn't put the nation completely back on its feet after the nearly 10 years of shaky, under-performing results of the economy since the far more massive and painful recession of 1973. How can you not (young as you are) recall the "malaise" of the nation from '73 to '80? It wasn't a continuous "depression" cycle, just as the entire decade of the 1930s wasn't, but it is characterized by a general lack of growth and prosperity that three Presidents couldn't drag us out of (and two of them were Republicans). When Reagan compromised with Congress on the TEFRA legislation, he was moving away from what he should have known to be the right course of action... just as I am saying the pressure to balance the budget in '37 by Congress forced FDR to make premature changes in policy and planning that caused a "backslide" in recovery and growth.

Both of these Presidents were thinking far outside of their partisan boxes. The New Deal was so "new" that most Democrats couldn't support each and every facet, otherwise FDR wouldn't be remembered as having a "hostile" Congress constantly working against him, even though the Democrats controlled BOTH Houses for all three of his first terms. "Reaganomics" was so radical that mainstream GOP leadership mocked him during the run-up to the 1980 election... INCLUDING HIS FUTURE VP!!!

I contend that Hoover had PART of the solution to the Crash of '29 in maintaining a top tax rate of only 24%... but his failure was in letting the laissez faire interests stop him from exerting some much-needed executive authority when it came to relief and recovery. This is supported by the complete lack of any effect on the disaster that any of Hoover's actions had.

FDR had PART of the solution in exercising the maximum amount of executive authority, but failed to maintain that low tax rate (even though Hoover was the one that finally raised it to 78% in 1932... not FDR). This is supported by the remarkable effects that FDR's policies had in initially turning the economy around and stopping the downward fall, and when the policies and programs were shut down and efforts were made to balance the books, the economy tightened up again as a reaction. This isn't evidence of a failure, but of a premature retraction of support that the government was giving the economy.

Reagan recognized these failures, discovered the means to avoid them in his own Administration, and only suffered the 9 months of negative growth and recession because he caved in to Democratic pressure from Congress to sign the TEFRA into law. The Reagan Recession wasn't evidence of the error of Reagan's plans, but of the error in allowing opposition politics to dictate the course of an Administration's vision.

These three historical figures, in my opinion, PROVE the validity of Keynes theory, and the success of each of them should be based on the degree of success that each had in bring the national economy BACK into a state of growth and/or recovery... NOT on what "should have been done" assumptions by people that weren't even alive when the events happened and are making assumptions to prove a political point rather than prove historical facts. So, let's PLEASE get back to the historical facts about the recovery of the national economy in the 1930's:

FACT: The depression that started on October 29, 1929, was OVER three years and ninth months later, when a continuous cycle of negative GDP growth, rising unemployment, increasing bank failures, increasing small business closings, and increasing loan foreclosures suddenly stopped and reversed the trend in June of 1933.

FACT: By the spring of 1937, all economic indicators showed a return to or above pre-Crash levels (except unemployment), and the determination was made to reduce deficit spending, balance the budget, and increase revenues. This course of action resulted in 13 months of decline, which was only halted by increased government spending... again.

FACT: Massive tax cuts and increased government spending completely turned around a 9-year cycle of recession and inflation in 1981 with the Reagan tax cuts and his policy of deregulation of business and banking practice.

FACT: Reversal of this policy resulted in 9 months of negative growth an an increase in unemployment to double-digit figures, due solely to compromise measures which were demanded by opposition members of Congress.

FACT: By the end of his terms (and beyond), Reagan had ushered in a rate of growth and prosperity for the nation that had never previously been seen, surpassing even FDR's 8.5% growth rate in GDP figures. This period of growth ended when his successor failed to follow his example and forced a tightening of the economic waistband that stifled what Reagan had started.

Neither FDR nor Reagan was trying to "get back" something that was lost. Both were trying to get us to someplace we had never been before. Mistakes were made... yes, this is true, and history has shown us that not all of what either did was the best course of action. I simply don't think, though, that you can label one of them an utter failure while declaring the other victor absolutum. The parallels might not be complete (obviously), but they are there, none the less.