Reganomics applied over the last 30 years

First, I'd like to ask for clarification on his latter point: that we "send trillions of dollars of taxpayers [money] to other countries. " Please source this comment, because so far as I know, it's completely inaccurate. If you're talking about foreign aid, please note that foreign aid accounts for about 1 percent of the federal budget [1], which isn't even close to "trillions. " Moreover, a lot of that money is spent on domestic goods, which provides a direct stimulus to the U. S. Next, he's referring to "Reaganomics"--the principle of which is inclusive of cutting taxes and spending, lowering inflation, deregulating, and increasing military spending [2]. However, Ronald Reagan himself didn't follow this model to a tee. Ronald Reagan raised taxes 11 times as President, and signed the " largest tax increase in the history of any state up till then" as Governor of California [3], tripled the federal budget deficit [4], and employed more government workers than President Obama [5]. Moreover, after he passed his tax cuts in 1981, unemployment rose to 10.8 percent [6]. Moreover, his tax cuts did not raise federal revenue, contrary to the conservative narrative, nor is there any evidence linking them to job growth; he was never able to recover the deficits he accumulated. Also, his initial premise can be disproved if I can provide a counterexample. In fact, we've had a strong economy when there was significant government interference. Following WWII--which, in conjunction with the New Deal, ended the Great Depression [7][8]--for about three decades, tax rates were between 70 and 91% [9], yet the economy grew 37% during the 1950s under Dwight D. Eisenhower, which can be attributed largely to the G. I. Bill and investments in science and technology, as well as the Interstate Highway [10]. He also managed to balance the budget, which Reagan never managed to accomplish. Now that I'd proven that the Keynesian system I would advocate was demonstrably successful, let's step back and examine "Reaganomics. " Does it actually work? It depends on how you view it. Indeed, military spending--often called "weaponized Keynesianism"--managed to bring us out of WWII and contribute to growth under Reagan. Does that not violate the core tenets of this principle, though? My opponent is arguing against government interference, asserting that no economy could prosper if the government intervenes actively. His argument is not "the government should only stimulate the economy through military spending. " If military spending has a stimulative effect, would the same principle extend to other areas of government? Yes. AARP reported that Social Security, for instance, supported 9.2 million jobs and about $1.4 trillion in economic output in 2012 [11], and generates about $2 in economic output for every $1 paid out [12]. Reagan's rhetoric reflected the principle that tax cuts spur growth, and thus raise revenue, so if we raise taxes, we'll shrink revenue. None of these are true, however. A study from the Economic Policy Institute demonstrates that the revenue maximizing effective tax rate on the wealthy is, actually, 68.7% percent [13]. Moreover, it demonstrates that since WWII, high tax rates have had no significant on economic growth, including investment, private savings, productivity, et al. A Congressional Research Service study came out with similar results, holding that tax rates since 1945 have had no material effect on savings, investment, and productivity, but have increased income inequality [14]. That's an important issue, actually, that I think we ought to explore more. To that end, here's an important graph I think we should consider from the Stanford Center on Poverty and Inequality [16]: This chart is the manifestation of income inequality, and thoroughly refutes the essence of trickle-down economics--the notion that, as the affluent do better, their wealth trickles down to middle-income and poor people. It hasn't, however. The top 20% have been doing better, while the bottom 60% has been doing worse and worse. But the chart shows something else. For a point, distribution was income was fairly equitable. Where does it begin to separate? Right around the late 1970s, and then is blown nearly out of proportion following the 1980s, that is, Ronald Reagan's presidency. Let's view a few more graphs, shall we? Let's also consider hourly wages relative to productivity gains [17]. What we learn is that, though productivity has nearly doubled, wages have stagnated and fallen amid the Recession. A Sentier Research report, published in January 2012, notes a 7.8% decline in wages since the crisis began [18]. At the same time, 95% of the gains of the 2009 recovery went to the top 1 percent of income earners [19]. I'd like to make one more point before I conclude this argument--and I know that I didn't get to deregulation or inflation, but hopefully we can address those in later arguments. Not only have an inordinate amount of the gains over the past 30-odd years gone to the very affluent, which ought to have "trickled-down" by Reagan's model. Also, conservatives today will cite Reagan in order to argue for even more tax cuts. However, tax rates on the very affluent today are near historic lows. I'd like to direct your attention to yet another chart [20]: Let us also not forget corporate tax rates--and, by the way, 1 out of 4 corporations pay no federal taxes [21]. Moreover, there has been a study conducted showing that 78 out of the 280 companies reviewed pay either 0% in federal taxes, or even less , despite earning $156 billion in pre-tax profits [22]. Here's the trend for corporate tax rates [23]: That's enough for now. Back to Pro. Sources: