Reaganomics (thing)

Also referred to as supply-side economics. The basic idea of Ronald Reagan's economic policy can be outlined by the following points:

• Cut the tax rates--particularly the maximum percentage of income a person can pay in income taxes, to put more money into the economy, which supposedly increases the overall size of the economy, and actually increases gross tax receipts.
• Ramp up defense spending--this is one form of government welfare that is okay because it provides a strong national defense and employs both soldiers and defense workers.
• Cut funding for the arts, education, and welfare. With the economy growing the way it is, the government can stop spending money on such things and the private sector can pick up the slack.

Did any of this happen? Certainly not on Reagan's watch--then we had record budget deficits and the gap between rich and poor widened more quickly, and the arts suffered. In the 90's most of that was reversed, we're now running huge surpluses, and although the gap between rich and poor continued to grow, it may finally be closing. It's clear that the economic growth of the 90s is what eliminated the budget defecits--not any tinkering done with the tax rates.

Why did the economy grow in the 1990s? I don't think it was Reaganomics, but I can't be sure. You see, it may take 10 years for a president's economic policy to take effect. If so, then Reaganomics worked, even though it messed things up badly short-term; if it doesn't take that long, then Clinton gets the credit. You decide.