August 13, 2015

Today in History: Reagan’s Economic Recovery Tax Act (1981)

John RobsonResident Historian
 

On August 13 1981, over a third of a century ago now, Ronald Reagan signed the Economic Recovery Tax Act into law and began the supply side revolution.

It’s hard to recall now just how astounding it was, after a half-century of ever more aggressive interventionism, much of it driven by Keynesian alchemy, to argue that the private economy was the main driver of growth, to win an election in the face of elite ridicule, and to act on it. But he did.

Ultimately the ERTA and another 1986 law cut the top marginal tax rate in the United States from 70 to 30 percent, unleashing a long boom including the personal computer revolution. And other countries followed suit, finally convinced that Keynesianism delivered not endless steady growth but stagflation and frustration.

So what happened? Why did governments from Washington to London to Ottawa lunge for their rusty Keynesian tools in the face of the 2008 economic crisis? How did we get back to asking government to manage the economy, and on what theoretical basis?

It’s time to get back to Reaganism and prosperity.

 

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Comments
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commented 2015-08-14 16:28:18 -0400
When it comes to economics, this only a piece of the puzzle to the economic picture. I love the quote from BC’s former Premier WAC Bennett: “I’m not necessarily a socialist, but I’m a socialist when necessary”. When one adopts a simplistic formula to apply it to all economic problems, that is a bad move. In economics there has to be flexibility of action depending on the type of factors creating the problem. For example, in Saskatchewan having Government Insurance, Saskatchewan Telephone, and of course Medicare, has been a blessing to residence of the province and Canadians . Private enterprise which often devolves into monopolistic enterprise does not function on the principle of supply and demand, is totally impotent when trying to control greed. Prices are set arbitrarily without regard to supply and demand. Ultimately, in economics, the consumer should decide.
commented 2015-08-14 15:27:28 -0400
Thank you John for pointing out the obvious (at least to those of us with a brain), that the government does not create wealth yet destroys wealth. Maybe you could use your insight to show everyone more of the instances where government, though well intentioned caused more harm than good. Love your segments!
commented 2015-08-14 14:34:25 -0400
John Robson – I wish I had you as a prof. in university. I have enjoyed every single one of your clips, interviews and opinions in the past few years.
Please keep ’em coming, sir. Thank you – your work is appreciated.
commented 2015-08-14 08:33:59 -0400
John Robson , I agree with Babs, “I LOVE your Today in History segments. I look forward to getting my Magna Carta DVD. Please keep your segments coming!”
commented 2015-08-14 00:27:34 -0400
I LOVE your Today in History segments. I look forward to getting my Magna Carta DVD. Please keep your segments coming!
Although, now that I am thinking about it, why don’t you just put your Magna Carta video up on the Rebel? I crowd sourced you but the point wasn’t to get an exclusive CD. The point was to enable you to make the thing. I would really like it if you were able to share it with others.
commented 2015-08-13 21:21:34 -0400
One thing that President Reagan didn’t have that the next ( hopefully) Republican will is a nation in which 51% of the people pay no taxes. That means that the majority of people in that country have a vested interest in sustaining the ‘my hand in your wallet’ system that has so completely destroyed the world economy. Sadly there is not much chance of a modern equivalent of that fine President under these circumstances because the ‘welfare class’ ( those who pay no taxes but reap the benefits of a socialist government) will never allow their empires to be eliminated by a free market President.
commented 2015-08-13 18:17:27 -0400
Not bad for a considered B grade actor! His other great accomplishment? Presiding over the tear down of the Berlin wall and the reunification of Germany!
commented 2015-08-13 18:06:04 -0400
LET’S HAVE A LITTLE FUN. SEE WHO’S BEST, SEE WHO’S RIGHT
COME ON, JOIN US NOBODY IS A LOOSER frasbow@live.ca

LET’S HAVE A LITTLE FUN REBELS
HERE ARE THE REBELS WHO ARE HAVING FUN
CHARLES MOULTON, DON MORRIS, JOAN ABERNETHY,
BILL COLLINS, JACK RILEY, PETER NETTERVILLE, PAT ANJALT, MARTY ASHFIELD, SYLVIA, TOKEN CONSERVATIVE, YVETTE MOZOLl , & ME FRASER MCBURNEY
PREDICT THE OUT COME OF THE ELECTION.
__________seats for the BLOC PARTY
__________seats for the CONSERVATIVE PARTY
__________seats for the GREEN PARTY
__________seats for the LIBERAL PARTY
__________seats for the NEW DEMOCRATIC PARTY

LET’S HAVE A CONTEST TO SEE WHO IS RIGHT
I WILL SEND A 1982 UNCIRCULATED CANADIAN SILVER LIKE DOLLAR TO THE WINNER AND A .925 SILVER NECKLACE TO EACH REBEL WHO PREDICTS THE ELECTION.
BUT THE LOOSER’S WILL SEND $10 TO EZRA’S DEFENCE FUND TO HELP DEFEND FREE SPEECH. LEFT OR RIGHT FREE SPEACH IS THE ISSUE DEFEND IT OR LOOSE IT.

FRASER McBURNEY PICKED AUG 1 2015
8 seats for the BLOC PARTY
169 seats for the CONSERVATIVE PARTY
0 seats for the GREEN PARTY
41 seats for the LIBERAL PARTY
134 seats for the NEW DEMOCRATIC PARTY
TOTAL 338 SEATS

DON MORRIS PICKED AUG 2 2015
3 seats for the BLOC PARTY
160 seats for the CONSERVATIVE PARTY
1 seats for the GREEN PARTY
45 seats for the LIBERAL PARTY
130 seats for the NEW DEMOCRATIC PARTY
TOTAL 338 SEATS

CHARLES MOULTON PICKED AUG 2 2015
I really hope I don’t Jinx the election by doing this.
16 seats for the BLOC PARTY
166 seats for the CONSERVATIVE PARTY
1 seats for the GREEN PARTY
36 seats for the LIBERAL PARTY
119 seats for the NEW DEMOCRATIC PARTY
TOTAL 338 SEATS

JACK RILEY PICKED AUG. 3 2015
10 seats for the BLOC
171 seatrs or the CONSERVATIVE PARTY
1 seats for the GREEN PARTY 49 seats for the LBERAL PARTY
107 seats for the NEW DEMOCRATIC PARTY
TOTAL 338 SEATS

BILL COLLINS PICKED AUG. 3 2015
10 seats for the BLOC PARTY
176 seats for the CONSERVATIVE PARTY
1 seats for the GREEN PARTY
30 seats for the LIBERAL PARTY
122 seats for the NEW DEMOCRATIC PARTY
TOTAL SEATS 338

PAT ANJALT PICKED AUGUST 10, 2015
9 seats for the BLOC PARTY
174 seats for the CONSERVATIVE PARTY
1 seats for the GREEN PARTY
79 seats for the LIBERAL PARTY
75 seats for the NEW DEMOCRATIC PARTY
TOTAL SEATS 338

PETER NETTERVILLE PICKED AUG 10 2015
4 seats for the BLOC PARTY
172 seats for the CONSERVATIVE PARTY
1 seats for the GREEN PARTY
26 seats for the LIBERAL PARTY
135 for the NEW DEMOCRATIC PARTY
TOTAL SEATS 338

MARTY ASHFIELD PICKED AUG 11 2015
4 seats for the BLOC PARTY
173 seats for the CONSERVATIVE PARTY
1 seats for the GREEN PARTY
37 seats for the LIBERAL PARTY
123 for the NEW DEMOCRATIC PARTY
TOTAL 338 SEATS

SYLVIA’S PICKED AUG 11 2015
7 seatsfor the BLOC PARTY
174 seats for the CONSERVATIVE PARTY
1 seats for the GREEN PARTY
46 seats for the LIBERAL PARTY
116 seats for the NEW DEMOCRATIC PARTY
TOTAL 338 SEATS
YVETTE MOZOLl PICKED AUG 11 2011
2 seats for the BLOCC PARTY
159 seats for the CONSERVATIVE PARTY
2 seats for the GREENPARTY 36
36 seats for the LIBERAL PARTY
95seats for the NEW DEMOCRATIC PARTY
8 seats for the INDIPENDENT
4 seats for the VACANT 2
2 seats for the FORCE ET DEMOCRACIES PARTY
TOTAL. 308

TOKEN CONSERVATIVE PICKED AUG 11 2015
Don’t shoot the messenger, consider this as motivation.
20 seats for the BLOC PARTY
110 seats for the CONSERVATIVE PARTY
1 seats for the GREEN PARTY
71 seats for the LIBERAL PARTY
130 seats for the NEW DEMOCRATIC PARTY

LET’S HAVE FUN SEE WHO’S BEST, SEE WHO’S RIGHT
COME ON, JOIN US NOBODY IS A LOOSER frasbow@live.ca
commented 2015-08-13 17:57:24 -0400
John your piece hit the hammer on the nail. Governments greed for taxes and control is killing our economy. There are not enough of us to pay for the government