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The Difference Between Reaganomics and Obamanomics

At Investor's Business Daily this weekend, Vance Ginn, a staff economist at the free market Texas Public Policy  Institute in Austin, Texas compares the economics results of Presidents Reagan and Obama. He began by saying:

"Despite adding almost a trillion dollars to our national debt and failing to keep the unemployment rate at or below 8% as advertised, liberals consider President Obama's signature stimulus package — the American Recovery and Reinvestment Act — a success, in part because of the number of jobs it "saved."

"Beyond the obvious failings of the president's plan, now more than five years old, the approach is illustrative of how presidents sometimes try to stabilize an economy using fiscal policy.

"But there is a right way and a wrong way."

Ginn notes that finding a recession, President Obama tried "to reinvigorate the economy by passing the ARRA and other policies over the next four years. These included ObamaCare to regulate the health care market, Dodd-Frank to regulate banks, Cash for Clunkers and extending unemployment benefits that collectively increased economic uncertainty and reduced incentives to hire and work." A so-called Keynesian approach.

On the other hand, Ginn notes, President Reagan, too, found an economy that had "back-to-back recessions," but adds:

"Contrary to President Obama's prescription of more government spending and regulation, President Reagan diagnosed government as the problem and prescribed a plan of lowering tax rates and reducing regulations to free firms and workers from disincentives to invest and work.

"This limited-government prescription led to a 92-month expansion — one of the longest on record — and helped increase the percentage of the working population from 57% to 63%.

"A substantially different policy approach provided vastly different results."

The graph below shows exactly the different outcomes that result from the prescriptions employed by President Reagan and President Obama:
 

Is it any wonder that a Gallup Gallup poll two weeks ago showed jobs, government, and the economy  were the top three problems facing Americans?

Readers of Growls are urged to call or write their Congressional representatives. If you live in Virginia's Arlington County, they are:

  • Senator Mark Warner (D) -  write to him or call (202) 224-2023
  • Senator Tim Kaine (D) -- write to him or call (202) 224-4024
  • Representative Jim Moran (D) -- write to him or call (202) 225-4376
And tell them that ACTA sent you!

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