Reagan’s Recovery vs Obama’s Recovery (UPDATE)

Last June, I compared the early 80s recovery under Ronald Reagan to the current recovery. I presented two graphs which compared total government spending and total government employment during the two recoveries. It turned out that government spending and employment both grew more during the Reagan recovery.

It’s been nine months since then. How have things changed?

The current recession began 62 months ago. Reagan’s recession officially began in July 1981 – so 62 months later would be September 1986.

At this point in Reagan’s Recovery (compared to start of recession):

• Total government spending was up 51%.
• Government employment was up 750,000.

Today (compared to start of recession):

• Total government spending is up 22%.
• Government employment is down 500,000.

Had total government spending and employment followed the same trend in this recovery as the 80s recovery, spending would be $895B higher and there would be 1,250,000 more government employees. Also, during the 80s recovery, the top income tax rate was cut from 70% to 28%. Had the current administration had the option of implementing those kinds of tax cuts and spending increases, the economy would be booming right now. The 80s recovery was fueled by massive government stimulus. Today’s recovery is struggling with austerity.