Obama 1.0 Depression 2.0

Times are serious and the economy is clearly on some sort of brink.  These are the headlines for tomorrow : http://www.ft.com/cms/s/0/232eb4de-9e20-11dd-bdde-000077b07658.html?nclick_check=1 stating the US is facing worst recession in 26 years. Doing the math that would put it in Reagan’s second year. Reagan had a problem with runaway inflation during the Carter years (the first term of the Obama Presidency) where inflation was not only double digits, it was close to 20%.  Reagan and the Fed had to tighten the money supply and force the nation into a recession to bring inflation under control.  What is interesting is how we came out of it. Reagan lowered the top rate of 70% down to a low of 28% when he left office. During that time the country had seen one of the greatest economic expansions in history. This article by the Heritage Foundation shows how lowering taxes increases economic growth and thereby increasing government receipts and how conversely raising taxes achieves the opposite http://www.heritage.org/Research/Taxes/BG1086.cfm.  Considering a President Obama would mean higher taxes, higher regulation and more trade restrictions which were precisely the actions done by Hoover and FDR that made  the Depression the Great Depression.  Amity Shlaes http://www.amityshlaes.com/ in her book about the Great Depression called the Forgotten Man details how Hoover and Roosevelt made the Depression much worse and longer by their meddling in the economy.  How under a President Obama would we grow our way out everything he proposes will not only limit growth but in all likelihood reverse growth which is the definition of recession.

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