Reagan’s Recovery vs Obama’s Recovery
Many in the GOP like to point out the fact Ronald Reagan’s economic recovery was much stronger than the current one. The reason being, they argue, was that Reagan’s policies were better than Obama’s. Let’s look at the details of the two recoveries.
The current recession began 53 months ago. Reagan’s recession officially began in July 1981 – so 53 months later would be Dec 1985.
At this point in Reagan’s Recovery (compared to start of recession):
- Total government spending was up 43% and increasing.
- Government employment was up 500,000.
- The highest income tax rate was 50%.
Today (compared to start of recession):
- Total government spending is up 20% and stalling.
- Government employment is down 400,000.
- The highest income tax rate is 35%.
It’s true that this recovery is more anemic than the 1980’s recovery. But the things the GOP are advocating – smaller government, austerity and low taxes – are more true today than they were then. Pretty ironic, isn’t it?
For anyone interested in the main difference between the two recoveries – it’s housing. If we had the kind of home building today as we did in Reagan’s recovery, GDP would be 2.7% higher. This would take GDP growth from the latest 3% figure to 5.7%, and the GOP would need a new campaign strategy.