From: MEDELMA@cms.cc.wayne.edu (Michael Edelman)
Subject: Re: SC rally: "We don't want a draft dodger for president!"
Organization: Wayne State University, C&IT
Date: Tue, 15 Sep 1992 15:05:09 GMT

In article <1992Sep14.221314.17457@Princeton.EDU>
niepornt@phoenix.Princeton.EDU (David Marc Nieporent) writes:
 
      [...I wrote...]
>>The figures peaked  when we were still operating under the effects of the
>>Carter policy. It takes a year or more for the effects of a new administration
>>to take effect. Of course, once it did we had ten good years, until the
>>next administration decided to adopt the Democratic party's platform.
>
>Does that mean that this is really Reagan's recession?  This is the
>silliest argument I've heard in a long time.
 
Read it again. It's a Bush/Congress "compromise" that killed growth.
 
>>[...]
>
>>>That's a hypothetical argument and can be made both ways.  The Soviet
>>>Union was economically in miserable shape and fast heading toward a
>>>collapse anyway.  It's arguable that massive defense spending on the
>>>part of the US contributed to that collapse; it's also arguable that
>>>it didn't contribute at all.
>
>>But it is very clear that US policy, particularly in Afghanistan, resulted
>>in increased setbacks to the USSR's foreign adventurism during the 80s. This
>>helped destabilize the regime.
>
>Sort of like Vietnam, right?
 
See, you're catching on.
 
>
>>>But the point is no longer whether it was a good policy, the point is
>>>how it should have been (and now must be) paid for.  Reagan did it by
>>>borrowing heavily from "the future" by creating massive debt.  If the
>>>alternatives to massive military buildup were so horrible, why
>>>couldn't we pay for it then?  And somehow, despite the retoric
>>>supporting it, I'm disinclined to believe that massive tax cuts will
>>>do the trick.
>
>>Continued nonsense. There was no "massive military buildup". Spending was
>>only 0.6% more in the 80s than in the 70s, and it was 2.2% less than in
>>the 60s. Insignificant. All the significant growth in spending was in
>>social spending, government administration, entitlement payments and the
>>like which certainly do *not* fuel growth.
>
>In the 1960's and early 1970's, we were at war.  Or didn't you notice?
 
So what? That makes absolutely no difference. Today's debt isn't from
military spending anyways. Re-read my figures. The big growth in the 80s,
as in every decade, was from social spending.
 
>Comparing peacetime levels of spending to wartime, and then concluding
>that we spent less while we were at peace, doesn't prove much.
 
What are you trying to say? That there's something different about debt
during  WWII and now? We lowered the debt during peacetime, if you recall.
You're drawing a distinction but you're not postulating any mechanism or
or theory about *why* it should be different. You need to give a reason
why it should be different.
 
>Furthermore, your statement seems to prove Reagan/Bush were lying when
>they claimed it was their policies which led to the end of the Cold War.
 
Where the heck did you get this idea? Policy is not the same as spending.
Depends what you do with the money, as US social spending for the past
50 years has shown.
 
>>There was, of course, a much bigger military buildup in the 1940s, and1
>>we paid for it through increasing debt until it was *three times* (read
>>that carefully: That's 3x) the 1990 debt level. At the time many made the
>>argument for increased taxes, but the decision was made to go with debt
>>instead. Increased productivity and growth paid that debt pretty quickly.
>
>>  [...]
>
>>>Low interest rates and a massive deficit are discouraging investors
>>>from putting money into the US economy: why invest in the US at 3%
>>>when you can invest in Germany at 9%?
>
>>For one thing, 3% is a bank demand deposit rate. There are inventments that
>>pay higher returns. Of course, during Carter's era banks and S&Ls were paying
>>12% and more because inflation was peaking near 17.5% on a per month basis.
>>You'd think, according to the logic of the previous poster, that we would
>>have seen a massive inflow of capital. In fact, we had a massive outflow.
>>as seen in the figures I posted recently.
>
>That's because real interest rates are what count, not nominal rates.
 
Very good. But you have to figure in taxes, as I did above. You neglected
that complication.
>
>>It's worse for domestic investors. If you're earning a 16% return under 12%
>>inflation it looks like you've got 4% real capital gains, but assuming a
>>a nominal 33% tax bracket you're actually paying an effective annual
>>marginal tax rate of around 107.5%.
>
>>>>The average American can clearly see that he was better off under Reagan
>>>>than Carter. And while I hold no particular admiration for Bush (who
>>>>pronounced Reagan's plans as "voodoo economics" back in 1980), he can't
>>>>possibly be as bad as Clinton.
>
>>>Hmmph.  I can't even begin to believe that the country was better off
>>>under Reagan than under Carter.  Things certainly looked better, but
>>>it was mostly an illusion--and as the Hollywood trimmings are slowing
>>>ripping apart, it's more and more apparent what damage was done behind
>>>the scenes.
>
>>Here we're dealing with either a short memory, a willful diregard for the
>>data, or someone who simply was too young to remember Carter's era. We
>>had a weak US presence around the world, record high inflation, record
>>high unemployment in the postwar era, and the numbers were getting worse
>>every week.
>
>That "high inflation" was a phenomena of the 1970s -- not just of Carter.
>It's become really fashionable (among both Democrats and Republicans)
>to make Carter into something he wasn't.  Actually, it was *Carter* that
>*began* the defense buildup.  It was *Carter* that began derregulation.
>And it was *Carter* who appointed Paul Volcker, whose monetary policies at
>the Fed helped bring an end to the inflation of the Ford-Carter years.
>
Go look at the wildly fluctuating M2 figures and the wild fluctuation in
short term infaltion rates during 1978-80 before you repeat this erroneous
claim. M2 was all over the place. Inflation topped 17% in the short run.
 
>Furthermore, it was *Carter* who reacted decisively to the Afghanistan
>invasion by immediately imposing a grain embargo on the USSR, and Reagan
>who decided to prop up the Soviet Union by selling them the grain they needed.
 
Which did nothing, of course, as grain is a commodity and as such is as
fungible as money. If you did a little research you'd learn that many
Europeans were undercutting this stupid policy by simply buying US grain
and reselling it to the Soviets. It was ineffectual. Carter's other brave
move was withdrawing our team from the Olympics, a move that certainly
brought the USSR to their knees.
 
Yes, Carter started the military buildup. Glad to see *someone* on the left
acknowledge that.
 
>>It took two years for Reagan to completely reverse this trend. We finished
>>the Reagan era with high employment, negligible inflation, record high
>>productivity, record high charitible giving and so forth.
>
>>We've published all these data- interesting that all the claims that the
>>Carter era was better than the Reagan era never seem to refute the figures
>>showing otherwise. In fact, they have no figures at all.
>
>>Assuming Carter was so great, how did Reagan win with such landslide
>>victories twice in a row? Let me guess: He "fooled" us. That's the usual
>>Democratic answer- massive ignorance of the electorate, right?
>
>It makes as much sense as the Republican answer to how Democrats keep
>getting elected overwhelmingly to Congress.
 
I.e., you have no answer.
 
>(Actually, there WAS no landslide in 1980.  Despite the perception of
>Carter as a pathetic excuse for a president, The Great Communicator got
>just over 50% of the vote.  Carter finished at 41% or so, which
>definitely showed him to be unpopular.  But Ronald Reagan wasn't exactly
>loved by the masses in 1980, either.)
>
And they loved him even more in 1984.
 
>David M. Nieporent   | Orioles 1992 World Series Champions
 
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