To the Editor:
The problem with politics today is that the truth is often hidden with half-truths.
Mr. Beaudette’s letter “Supply-side economics works” (Nov. 16) is a perfect example. He is correct that the federal tax revenues did increase dramatically during President Ronald Reagan’s years in office, and also during the term of President George H.W. Bush.
What he fails to mention is that national debt rose even faster during this period. Looking at the ratio of federal debt to the nation’s gross income, or gross domestic product (GDP), we see that it fell from 125 percent at the end of World War II to 30 percent by 1980. It rose during Reagan’s term, with the tax cuts, from 30 percent to 50 percent.
This rise continues during first Bush term to over 60 percent. It is not until the President Bill Clinton years and a tax increase on the rich that we see this ratio fall to about 55 percent (according to the Federal Reserve Bank of St. Louis).
Unfortunately, President George W. Bush again cut taxes and the debt ratio jumped to 70 percent and the economy collapsed with the start of the Great Recession.
As President Barack Obama and Congress fought to bring the recession under control, the debt ratio rose to about 105 percent in 2015, when it again begins to drop. But with Republican tax plan it is likely to return to the levels last seen during WWII.
Unfortunately, the increase in the federal debt is only part of the problem to result from Reagan trickle-down policies. The bigger problem may be shifting more and more of the nation’s wealth to the super rich.
In 1950 the top 0.1 percent of the population received about 4 percent of the U.S. pre-tax income and it stayed below 4 percent until Reagan’s presidency, and the Reagan tax cuts, then their share rose above 4 percent. By the end of Reagan’s term it is up to 6 percent and by 2010 it is over 10 percent.
The Reagan economic policy resulted in rising federal debt and a rise in the wealth of the super rich and a matching decline for the rest of us. The current Republican tax plan will have the same result.
I am personally disappointed in our members of Congress, reps. Erik Paulsen and Tom Emmer, for their support of such a plan, but I guess those contributions from the Kochs and their friends are too inviting.
Jim Weygand, Carver
Carver Herald, November 24, 2017