Let's play a game...

I'm going to make some rather serious posts in the next coming days.  Let me tell you why...

I was driving home last night (Friday night) and was listening to Levin on the radio.  He was, of course, beating up Obama and beating up anyone calling in to his show, conservative or otherwise.  His discourse (I can't call it a discussion) brought up several points that struck me as more than odd, so I spent hours last night after I got home checking on what he said.

I know F. Ryan and Jambo are both busy people... but I'm really hoping there is some time for both of them to chime in as I post and check my thinking.  The game I want to play?  Let's look as closely at the Romney-Ryan campaign promises and the conservative agenda (as it stands now in 2012) as we have with what the Democrats are saying and doing.  As I do this, I'm hoping Ryan can rebut or counter my questions, and Jambo can offer some objective rationale as it is needed.  We have all spent time criticizing Obama's policies and agendas, but after hearing Levin last night, I'm wondering how much "Kool Aid" we are drinking by simply accepting as gospel all that the conservative realm tells us.  I'm not singling out Levin here, either... I'm rapidly growing very very tired of Beck's fixation (bordering on obsession) with the term "progressive".  And I still have unanswered questions about statements made by the Romney-Ryan camp since the GOP convention.


So, I'm simply going to begin.

Let's look at the single biggest issue between the two candidates and their parties as I understand it to be:

TAXES.

Obama has said he wants taxes raised, mostly for those individuals making more than $250k annually.  He wants to do this to raise revenue for the Federal government, without massive spending cuts.

Romney-Ryan want to (at best) cut taxes, or (at least) leave them where they were since Bush's tax cuts in 2002.  They insist this will increase revenue by stimulating economic growth and generating a greater income tax base.  They give credit for their idea/plan by calling it "Reaganomics"... or at least harkening back to those heady days when Ron Reagan was at the helm.

Can we take a look at this, just a little bit closer?  Bare with me here...

Dec. 1980.  US Prime lending interest rate hits the all-time high of 21.5%... meaning, in short, that borrowing money had become more expensive than at any other time in American history.  To counter this, Fed Chair Paul Volker sets interest rates at an all-time high, too.  By the time Reagan is sworn in, Fed revenues will fall short enough to make the biggest deficit to date.  Reagan cuts taxes.  It's a big cut, too.  What happens?

Nothing.  Really... nothing happens.  The first full year that the tax cuts were in place (so by the end of 1982), the growth rate of the GDP was -8.9%. Unemployment had risen 1.1%.

Ahhh... but then, what happened?  The Fed dropped rates to below 11% for the first time in almost 6 years, and by the end of the next calendar year, the GDP had grown 5%.  By the '84 elections, the GDP was 34% bigger than it was when Ron took office.  Good news, huh?   What else happened in 1982, BEFORE the "recovery" began?

Reagan signed into Law the Tax Equality and Fiscal Responsibility Act 1982, which was the single largest tax increase in US history to that date.  Reagan raised taxes, but reduced spending, and thus reduced the deficit by increasing revenue AND slowing spending.  This is important... the TEFRA increased revenue by raising taxes, which was 100% contrary to what Reagan promised would happen when he detailed the Laffer Curve during his election campaign and his first year in office.

So, which was actually responsible for the "boom" that followed the Reagan Era?  Was it the tax cuts that were all but erased in 1982/83, or the Federal Reserve interest rate manipulation?  One is squarely on the shoulders of the CIC... the other is utterly out of his control.

Reagan came into a disastrous economy, and did what it took to turn it around.  The size of government grew at roughly 2.3% for his first term.  GDP growth averaged 5.1% his first term.  Taxes ended up roughly 1.7% lower across the board, but the only real cuts were to the poorest of Americans when he raised the tax threshold to $12k/year.

Obama's also came into a troubled economy.  Government has grown at a rate LOWER than Reagan's did... 2.2% in his first term.  GDP has grown at a rate of 15.9% in the first three years... substantially better than Reagan.  Taxes remain the same (for now) at 2002 levels... just where Bush Jr. had them.

The big difference is the national debt as a percentage of GDP.  When Reagan came into office, it was roughly 33% of GDP, and when he left it was a whopping 52%.  When Obama came into office it was 86%, and now sits just over 101% of GDP.  According to my math, Reagan increased the debt by 37%, while Obama has increased it by only 15%... so how does that jibe with what we keep hearing about "fiscal responsibility?"

I hope you all see the disparity here.  I'm NOT voting for Obama... but I'd like this discussed, at length if it isn't too much trouble.  I'm confident that less spending is the best road... but how to get there?  Lower taxes would be nice, but a balanced budget WON'T happen unless we raise taxes significantly over the short term, or slightly over the very long term.

Am I wrong?