Obamanonics Better Than Reaganomics?
By Tommy Leung on March 5th, 2009 in Economics
According to the DailyKos reporting a Fox News poll, Obama’s “economics” is more popular than Reagan’s economics. I never lived through the era of Reagan so I don’t know what it was like under the execution of his economics.
I do know that the four principles stated in Wikipedia about Reaganomics are economically sound:
- reduce the growth of government spending,
- reduce marginal tax rates on income from labor and capital,
- reduce government regulation of the economy,
- control the money supply to reduce inflation.
You always want to reduce government spending so that more productive uses of money can take place in the private sector. Taxes are always a disincentive to work and be productive so they should always be lowered. The best case scenario is we abolish all taxes on income.
Regulation is all the rage these days from the left and the right. The reason why we are in this economic mess was due to regulation so more of it is not going to help. Regulation is any intervention into the market and the government has been intervening for decades. (Read Meltdown for a comprehensive look.)
We should never let the government run the printing presses and dilute the value of existing dollars. Deflation is a good and inflation is an evil–everyone benefits from lowered prices. Idealy, the market would take care of what medium is used as money.
While Reaganomics looks good on paper, Obamanomics is bad on paper and in execution. The comparison of Obama to FDR was already a bad sign. Few Presidents has done more to harm the economic well-being of Americans than FDR. He took a recession upon entering office after criticizing Hoover’s absurd government spending and made things many magnitudes worse by injecting Hoover’s policies with steroids.
Obama is taking Bush’s economics and injecting it with steroids. Bush’s economics was poor and has largely extended length of the recession. Obama’s economic actions since taking office will make things even worse. You cannot solve a problem caused by excessive spending and credit with more spending and credit. To think that America is going to become prosperous once again by going into even greater debt is exceptionally poor financial advice.
It is unnerving to see a poll suggesting Americans believe we need more socialism over free markets. However, I hope that this is just a wanting to believe that Obama can solve the nation’s economic crisis than a real indication of people’s perceptions. Everyone wants to be out of this crisis and back to the good life.
Free markets made this nation the economic engine of the world. Centrally planned systems have driven nations into destruction through all of history.
Tags: daily kos, economic crisis, fox news, meltdown, obamanomics, polls, reaganomics
