Reckless Reaganomics

Make no bones about it: this financial crisis, mushrooming and rippling through supposed rock-solid institutions from banks to lenders to investment companies all the way up into what will be the ultimate test of the United States’ fiscal viability, had its beginnings under the Ronald Reagan administration.

Reagan’s legacy is draped in his trickle down economic policy. Sure —– he militarily outspent the USSR and brought that empire down. Sure —– he was an uplifting speaker who gave this country back its hope and vigor. But here is what else Reagan wrought.

Reagan was a big believer in total deregulation. He applied it to the airline industry and to financial institutions. Capitalism is a laissez-faire policy. Let the chips fall where they may. The rich will still be rich. However, the middle and lower classes will grow and the divide between the upper echelons and Joe America will increase drastically.

There are a number of events from the Reagan years that stick in my memory. During the 1980’s, I was a thirty-something mother who was raising two babies. However, even I had a thought or two about policy during that time. Reagan’s economic and political outlook had non-recuperative effects that translated into very bad social policy.

First, I remember during the 1980’s the Japanese were buying up American real estate faster than you could say “Sayonara.” Skyscrapers in major metropolitan areas were scooped up. What I deeply remember is that many heartland farmers could not maintain their land which, in many cases, had been in their families for generations. Reagan’s trickle down economic policy NEVER dripped down to help the farmers, the very people who fed our nation. Many farms were lost or sold to the Japanese.

Another vivid memory I have from that time is that many mental institutions were closed down and its residents released on the streets. This is the period when we had thousands of homeless people sleeping in our cities, parks, streets, anywhere and everywhere. Reagan did not believe that the government had any responsibility to pay to house and care for these mentally unstable, indigent people. Let the chips fall where they may. Capitalism working at its worst, and economic policy wreaking havoc with social policy.

Perhaps my most vivid memory is of Reagan saying that “all the Democrats do is tax and spend.” Reagan borrowed and borrowed from our own government so that he could spend and spend on arms to put the USSR out of business. So yes, the Berlin Wall fell, but man oh man, were we ever so deep in debt. My take on this is that the Republicans BORROW and spend. George W. Bush, over the last eight years, has taken up this borrowing tactic as well. Borrowing on end by printing up funny money from the Mint is not acceptable, even if the reason for it is military action. As we have seen, with our national deficit in record territory, there are financial consequences of dire proportions.

So now on top of the war debt, we are spending even more non-existent dollars on financial bailouts. I do not have the answer. All I know is that if we do not rescue many of these financial institutions, we will lose our personal shirts as the markets react to their tanking value. On the other hand, if we do bail out these institutions, we, the taxpayers, are going to have huge tax liabilities in order to pay back the government for these “saves.”

Two things I do know for sure: first, we should NEVER spend more than we have on tap and second, there should be a flat income tax rate of 15%.  That way there would be no loopholes, shelters or evasions that wealthy people and above all, corporations, could use to dodge their fair share of taxes.  Fifteen percent for EVERYONE;  No exceptions.

So as true as my name is Yo Mama, Ronald Reagan was the architect of what has befallen us today. Increasing a country’s morale is no excuse for taking from the poorer to line the pockets of the richer. This is NOT capitalism; this is rape. Plain and simple, it is economic and as a result, social suicide.

The part of this current predicament that we have not seen yet is social discontent and uprising. Do not be fooled: when absolutely NOTHING trickles down to the middle and lower classes, there will be frenzy afoot.

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2 Responses to “Reckless Reaganomics”

  1. Nephew 2 Says:

    “Increasing a country’s morale is no excuse for taking from the poorer to line the pockets of the richer.” I don’t exactly think a regressive 15% flat tax where poor and working class people who have no extra income pay the same tax rate as people who can afford luxury items on their salaries is the soultion. Taxation should be progressive. Waelthy people who have more income than they need for life’s neccesities should pay more of the burden in percentage terms. Why do capiital gains, which are earned mostly by people of greater economic means, taxed at a lower rate than your typical middle class family’s income? That’s not fair. As Joe Biden said, it is patriotic for those who have more to contruibute more–a sentiment with which I fully agree.

    More importantly, the federal government wouldn’t have to do these bail outs if there were reasonable regulations in the first place. The culture of “government is bad” has shown itself to be a total fraud. These government haters can’t run a war (Iraq), can’t provide disaster relief (Katrina and Ike), can’t take care of our infrastructure (New Orleans levees and the Minnesota bridge collapse), and can’t protect the economy (S&Ls, Bear Stearns, sub-prime mortgages, Freddie, Fannie, Lehman, Merrill, AIG). The real irony is that their “no government” attidude has now required the state takeover of the country’s largest insurance company and as much as a trillion dollars in mortgage debt. The government is bad world view has now, in one great but unfortunately sad irony, brougt us state sponsorship. Reasonable regulation is not inconsistenet with capitalism; it is critical to it. Without reasonable regulations, we are now in a situation where the state is forced to take over the private sector to prvent the collapse of our economy. So much for capitalism; so much for small government. These dogmatic critics of regulations have necessitated the federal takeover of our financial sector. Nice work from the greedy, selfish, unpatriotic Republican hypocrites who have brought us here. A true socialist couldn’t have done a better job if he/she were trying.

  2. Natalie Rosen Says:

    Nephew No. 2 makes some great points and states it impeccably! Yomama I agree with you in terms of your analysis of the Reagan years. I think you are totally correct the beginning of this end began there. Nephew No. 2, though, makes a compelling case and one which I agree with more in terms of tax structure. If you have more you pay more. That fair and it’s that simple! Great dialogue.

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