lees20022 (November 30, 1999 at 12:00 am)

The expectation of tax cuts spurs economic growth. Investors look to the future to judge the viability of their business ventures , not the past.

Boeing727223 (November 30, 1999 at 12:00 am)

I totally disagree with that, if we elected Jimmy Carter for another term and he raised taxes how would that have helped? Also, your not factoring in the fact that Reagan had to deal with a spending Congress. We can agree that not controlling spending can have negative effects...such as Bush 43 cutting tax rates, but spending only second to FDR.

U2387 (November 30, 1999 at 12:00 am)

After the massive, necessary 1981-82 recession, the economy would have come back very strong no matter who was in office. The money supply was the main driver of this. Tax cuts can have a positive impact on economic growth if they are fully paid for through offsetting tax increases or reductions in spending, which Reagan didnt do. Even then, treasury has said the effects are modest compared to other factors(a few hundreths of a %point). Defcit spending easily cancels modest positive effects.

Boeing727223 (November 30, 1999 at 12:00 am)

Regarding the tax increases under President Reagan, lets not forget he didnt initiate them, but he had to face the political realities of a Democrat controlled congress..

Boeing727223 (November 30, 1999 at 12:00 am)

Well Volcker did end stagflation, but his policy of limiting the growth of money contributed to the recession of the early eighties..it was the across the board Reagan tax cuts that helped bring the country out of that recession. I do agree that corporate tax rates need to be lowered...I believe we are second to only to Japan for the highest Corp tax rates. The Federal Reserve does have an impact on the economy, but I still dont understand how lowering tax rates has limited effect.

U2387 (November 30, 1999 at 12:00 am)

Yes, we can agree tax cuts contribute to economic growth. We should broaden corp tax base and lower rates. I think there is a time and a place for across the board-when JFK cut them, it was necessary, taxes were too high. I dont think Reagan's across the board tax cuts contributed too much as 1982 and 83 saw post depression highs of unemployment. The main cause of the 1980s boom was Volcker finally loosening up on the money supply, plus govt borrowing. Reagan also increased many taxes.

Boeing727223 (November 30, 1999 at 12:00 am)

I think we can agree that tax cuts do contribute to economic growth..I'm trying to find where tax cuts across the board were given and the economy failed. The key is to cut taxes but also cut spending. The federal Govt's main responsibility is Defense spending. Kennedy did cut the top rate from 90 to 70 so you are correct. I think the point Reaganites are trying to make is that tax cuts accross the board do work and do contribute to economic growth.

U2387 (November 30, 1999 at 12:00 am)

No kidding not everyone worked in defense- I didnt say that. Just stated a fact that increases in defense spending that come w/ wars pump up the economy- thats how the depression ended. Govt spending in general is a large component of GDP. Of course, the tax cuts contributed to it. But, the Reaganites miss 2 points: 1.)Kennedy tax cut was aimed at the demand side- look at what he said himself-not supply side and 2.)the cut in the top rate was necessary as it was a lot higher than it is today.

Boeing727223 (November 30, 1999 at 12:00 am)

Not everybody worked in defense during the Vietnam war, and yes the tax cuts did help prolong the growth.

U2387 (November 30, 1999 at 12:00 am)

It was stronger and more sustained, more jobs, etc in the 1990s under Clinton. Yes, the economy was excellent under Kennedy- 1961-1963- he passed some very important targeted investment tax credits that still exist today,lowered business taxes and closed loopholes to pay for it. His tax cut he is referring to here was not passed until after his death by LBJ, so while the economy was undeniably good under JFK, the tax cuts did not cause it. The rest of the 60s growth was helped by Vietnam too.