The time was 1981 and another political party and another President were warning of grave consequences if something wasn’t done fast to fix the economy.
Is the U.S. "threatened with an economic calamity of tremendous proportions," as Ronald Reagan told the U.S. two weeks ago? .... though President Reagan's rhetoric may have been a bit overblown, the economy is indeed in serious trouble. Declining productivity, recalcitrant inflation and the explosion of Government spending have so shackled U.S. business that growth will be sluggish well into the future. Moreover, the time left to reverse that course is growing short. ... Manhattan Economic Consultant Alan Greenspan, who is also a member of Reagan's new Economic Policy Advisory Board, pointed out that towering interest rates are threatening the survival of many American financial institutions. Said he: "A continuation of business as usual will lead us off a cliff."
Time Magazine Feb. 1981
The President was Ronald Reagan and his solution was a budget that increased military spending, slashed social programs to the bone and handed HUGE tax cuts to the upper and middle classes.
Reagan promised to balance the U.S. budget by 1983.
Reagan's program of deep budget cuts and generous tax reductions is an ambitious, but unorthodox, attempt to revitalize the economy. He hopes these measures will speed growth, slow inflation and balance the budget by 1983.
Tax rate – upper incomes :
1981 - 69.125%
1982 – 50%
1983 - 50 %
1984 – 50 %
US debt Carter’s final year in office 1980 : 930,210,000,000
US debt Reagan’s first year in office 1981: 1,028,729,000,000
US debt Reagan’s 2nd year in office 1982 : 1,197,073,000,000
US debt Reagan’s 3rd year in office 1983 : 1,410,702,000,000
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Did it turn around the economy and stop it from "falling off of a cliff"?
Unemployment rate:
1980 = 7.2%
1981 = 7.6%
1982 = 9.7%
1983 = 9.6%
http://www.nidataplus.com/...