Drudge Retort: The Other Side of the News
Monday, May 05, 2014

John Cassidy, The New Yorker: On being elected in November 1980, [President] Reagan inherited an economy that was gingerly emerging from a slump: taking the year as a whole, the economy contracted by 0.2 percent. Like any good Keynesian, the new president's response was to promise a substantial stimulus package. This was duly delivered in the form of a substantial military buildup and broad tax cuts, the latter constituting the central feature of the Economic Recovery Tax Act of 1981.

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Corky

 

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In the Reagan Administration, some true believers were convinced that the rise in the budget deficit would be short-lived: lower tax rates would stimulate so much growth that tax revenues would eventually rise well above their pre-tax-cut levels: this was the "Laffer curve" theory. The realists, such as [OMB director David] Stockman, hoped that the deficits would force Congress to cut spending: this was the "starve the beast" theory.

Unfortunately, for the Reaganites, neither theory panned out.

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"Eventually, as the Fed reduced interest rates, the stimulus worked, and G.D.P. growth picked up sharply. Deficits continued to be a problem, however -- one that was left for Reagan's successors, George H.W. Bush and Bill Clinton, to deal with.

In strict terms, Reagan's neglect of the deficit wasn't Keynesian. Keynes himself believed in letting the deficit rise in a recession and paying down debts in the good times. In America, though, Keynesianism has always been associated with stimulus programs, big government, and deprioritizing the deficit. In all of these ways, Reagan was a Keynesian.

But a word to the wise: don't waste your time trying to tell that to anybody in the Republican Party."

#1 | Posted by Corky at 2014-05-03 10:19 AM | Reply | Flag:

. Keynes himself believed in letting the deficit rise in a recession and paying down debts in the good times. In America, though, Keynesianism has always been associated with stimulus programs, big government, and deprioritizing the deficit. - El Corko

Well done!

In one sentence you not only encapsulated the essence of Keynesian economics in a nutshell, but you also succinctly articulated policies that are described as Keynesianism, but are in reality not.

#2 | Posted by JeffJ at 2014-05-03 10:28 AM | Reply | Flag:

#2

I don' theenk that word means what yew theenk it means....

#3 | Posted by Corky at 2014-05-03 10:55 AM | Reply | Flag: | Funny: 1

Inconceivable!

#4 | Posted by JeffJ at 2014-05-03 10:59 AM | Reply | Flag: | Funny: 1

lol!

#5 | Posted by Corky at 2014-05-03 11:12 AM | Reply | Flag:

I thought he was from Illinois, not Keynesia.

#6 | Posted by goatman at 2014-05-03 04:15 PM | Reply | Flag:

I thought he was from Illinois, not Keynesia.
#6 | POSTED BY GOATMAN

You make it sound as though the place doesn't exist.

#7 | Posted by rstybeach11 at 2014-05-03 04:23 PM | Reply | Flag:

You make it sound as though the place [Keynesia] doesn't exist.

Oh yes, it exists all right. That's where Obama was born, right? ;)

#8 | Posted by goatman at 2014-05-03 04:31 PM | Reply | Flag:

Reagan was absolutely a Keynesian. I've been saying it for years.

No one listens to me...

#9 | Posted by madbomber at 2014-05-03 05:49 PM | Reply | Flag:

Reagan borrowed and spend in both good and bad times. Reagan wasn't a Keynesian. Reagan was a Republican.

#10 | Posted by Whatsleft at 2014-05-03 08:18 PM | Reply | Flag: | Newsworthy 3

spent

#11 | Posted by Whatsleft at 2014-05-03 08:18 PM | Reply | Flag:

i read 'general theory' before i even got into school. my old man (a now semi-retired private banker with a healthy pension courtesy of credit suisse) made me read it at 16. he always held the maxim: "be sure to know where your enemies get their idiotic ideas from"

#12 | Posted by NerfHerder at 2014-05-05 10:03 AM | Reply | Flag:

I thought he was from Illinois, not Keynesia.

#6 | Posted by goatman

Ah........... that would be KENYA.

#13 | Posted by Sniper at 2014-05-05 10:15 AM | Reply | Flag:

The capitalists are all Keynesians when it suits them. They screw up then its run wee wee wee all the way.

Kenya is a mostly Christian nation and is currently based on archeological findings thought of as the cradle of humanity. Current evidence suggests the beginnings of human evolution began in Kenya.

English is also widely spoken there.

The earliest Kenyans emigrants to come to the north American continent 300 years ago did not do so willingly. They came here as part of the American slave trade. Current Kenyans immigrants tend to be well educated, assimilate well and most are employed in technological and health related professions.

In other words they are pretty much what the republiclowns say they want in an immigrant...

However... we know what the clowns actually want is someone to operate a leaf blower so they don't have to, do it for less than minimum wage and... most of all ... to provide them with endless hours of something to complain about, think themselves superior to ... yet feel victimized by and really cheap to deport.

#14 | Posted by RightisTrite at 2014-05-05 12:03 PM | Reply | Flag: | Newsworthy 1

Reagan inherited a democrat caused recession. No recovery was underway.

#15 | Posted by tmaster at 2014-05-05 12:25 PM | Reply | Flag:

You know, it seems you all forget there was a congress who also had to pass budgets and had influence on spending and debt. Reagan wasn't a monarch.

Re#14 - What are you talking about? Could you at least try to make a coherent point.

#16 | Posted by danv at 2014-05-05 12:46 PM | Reply | Flag:

**** He was an IDIOTsian!

#17 | Posted by AntiCadillac at 2014-05-05 01:46 PM | Reply | Flag:

#14 | POSTED BY RIGHTISTRITE AT 2014-05-05 12:03 PM | REPLY | FLAG:

I like turtles.

#18 | Posted by bartimus at 2014-05-05 05:04 PM | Reply | Flag:

What is the point of this article? It been 26 years since he has been in office, what about the guy in office now?

#19 | Posted by danv at 2014-05-05 05:52 PM | Reply | Flag:

Next up: Reagan = Jesus.

The psychological operations is 24/7.

The truth was that he was the largest tax and spender since the new deal.

#20 | Posted by Shawn at 2014-05-05 08:20 PM | Reply | Flag:

George Bush Senior and most conservative economist called "Mr. Hollywood" Ronald Reagan's foolish "trickle down economics" voodoo economics. Then Reagan bribed-offered Bush Sr. the VP job ..to just SHUT-UP !
Sammy in Arizona and Rhode Island ...
Never forget that Ronald Reagan sold some of our most sophisticated weapons to his conservative friends in Iran (Iran-Contra Scandal) Then funneled the cash to the Contras a right-wing conservative terrorist group that murdered thousands of innocent civilians

#21 | Posted by SammyAZ_RI at 2014-05-05 09:08 PM | Reply | Flag:

So what are we trying to hide now? Every time liberals want to deflect they go to Reagan or Bush.

#22 | Posted by sames1 at 2014-05-05 09:39 PM | Reply | Flag:

There are no real liberals in power nor fascist media.

Not one.

When ever either party wants to deflect attention from their fascist whores for the fascisti they always obfuscate to the other side.

They are both fascist pigs.

No exceptions.

Not one.

#23 | Posted by Shawn at 2014-05-05 10:01 PM | Reply | Flag: | Funny: 1

Re#14 - What are you talking about? Could you at least try to make a coherent point.

#16 | POSTED BY DANV AT 2014-05-05 12:46 PM | REPLY | FLAG:EYE ROLL

I made as coherent of a point as Snippy and the Goatclown. Why don't you grow a sense of humor DanV. You really don't want to match wits with me because I am a whole lot smarter than you and I will quickly fold you up and insert you back into the bong water swamp you crawled out from.

Besides some conservatron libertarian wannabee intellectual such as your self doesn't even offer a decent contest. You are too biblically inclined present a challenge.

#24 | Posted by RightisTrite at 2014-05-06 05:21 PM | Reply | Flag: | Newsworthy 1

Thirty-three years ago Republicans were allowed to publicly acknowledge the simple fact that government spending can benefit the country.

Today's Republicans have to deny it.

Reagan also signed the Brady Bill, and gun control legislation while governor of California. Plus an amnesty bill for undocumented workers. He wouldn't make it past the Iowa Caucuses today... at least not as a Republican.

If they didn't know his name, today's American conservative would tell a politician with Reagan's track record "It's sunny and you're rich." articles.latimes.com

#25 | Posted by snoofy at 2014-05-06 07:26 PM | Reply | Flag:

Thirty-three years ago Republicans were allowed to publicly acknowledge the simple fact that government spending can benefit the country.

I'm pretty sure they didn't mean trillions and trillions of dollars, snoofy. You couldn't figure this out? Not to worry -- considering how often your ilk brings up the out of (temporal) context quote of "deficits don't matter" you aren't the only clueless one on this matter

#26 | Posted by goatman at 2014-05-06 07:34 PM | Reply | Flag:

I'm pretty sure they didn't mean trillions and trillions of dollars
#26 | Posted by goatman

I'm pretty sure they did, seeing as they raised the debt ceiling without fanfare by trillions and trillions over the course of about three decades.

Heck, we even had a Republican President who increased the debt by starting a war at the same time as he increased the debt by lowering taxes.

#27 | Posted by snoofy at 2014-05-06 11:31 PM | Reply | Flag:

I'm pretty sure they did

I'm sure you are.

That three decade in the future prescience they had back then was something else, huh?

...raised the debt ceiling without fanfare

I guess you were sick all those days and didn't catch the news about the battles and bruhaha over raising the debt ceilings.

Sorry snoofy, you are clearly out of touch here and I've no desire to be drawn into your nightly tractor beam of stupidity by having to explain what most of us already know.

#28 | Posted by goatman at 2014-05-06 11:37 PM | Reply | Flag:

...raised the debt ceiling without fanfare

I guess you were sick all those days and didn't catch the news about the battles and bruhaha over raising the debt ceilings.
#28 | Posted by goatman

That wasn't happening back when OIF and the Bush tax cuts were rolled out, at least not among Republicans.

Heck, Bush even gave the airlines a bailout right after 9/11. That government spending can patch up the economy during a rough spot didn't really become ideologically toxic for Republicans until they lost the White House in 2009. That was when "battles" over raising the debt ceiling started. Prior to then, a Senator Obama made a speech laying out some of the concerns you addressed, about how much is too much, but the debt ceiling vote still passed easily, and with widespread Republican support.

#29 | Posted by snoofy at 2014-05-07 01:39 AM | Reply | Flag:

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