Get America out of debt

JohnJacques

Banned
He didn't spend the Soviets into the ground. They didn't play catch up with him, they had already been spending a hell of a lot more than us. Reagan did not win the Cold War. And, if you ask me, we're lucky that the Cold War ended with a fizzle and not a bang- because Reagan was clearly pushing towards that possible outcome.

His abandonment of detente hurt the reformers of the Soviet Union, causing the attempted hard-liner coup, and caused the Soviets to collapse as suddenly as they did. The thing is, a sudden collapse like that held a lot more potential for a bang than anything that would have happened under gradual reform.

The fact that Reagan managed to avoid blowing up the world is not a reason to consider him a good president, simply because he was the one who got it close to that end.
 
What about a "non-pushed" national debt? What I mean is, the government offers bonds at a fixed interest rate, say 2 percent, take it or leave it. The government would be willing to borrow whatever people wish to lend at that rate, but no more. Of course this makes predicting the amount of borrowed funds available difficult....

Could this work?

Would it tend to stablise or destablise the general economy?
 
For starters this well balanced Slate article (yes, Slate, despite their liberal bent does even handed pieces) provides quite a bit of useful background information.

Because he spent the Soviets into the ground instead of nuking them? I, for one, would much rather win a war (even a Cold one), by economic means instead of radioactive ones.

It helped, but it wasn't the sole reason. They would certainly have kept spending money on the military at the same rate, and given that their industrial was a mix of 1960s technology and stuff stolen from the Japanese (and the US) that was becoming a big factor.

Reagan did not win the Cold War. And, if you ask me, we're lucky that the Cold War ended with a fizzle and not a bang- because Reagan was clearly pushing towards that possible outcome.

Although the conservative movement was pushing for a very hard line on the USSR Reagan himself clearly defined the situation: the USSR was an Evil Empire, but evil can always be redeemed.

That's a key reason Reagan engaged in so many talks with the Soviet Union despite what his advisors and conservative Republicans were pushing for, leading all the way up to (absolutely horrifying to conservatives) Iceland agreement to get rid of nuclear weapons.

Now that deal did fail over SDI (specifically: testing nukes in space, required for SDI to work), but Reagan was serious about eliminating nuclear weapons and he was equally serious about being willing to hand over SDI. Gorbachev believed him on nuclear weapons, did not believe him on SDI. Both sides helped that deal fall through.

Key grafs from Slate:

April '86, brought the Chernobyl disaster, which, among other things, made Gorbachev realize that information had to circulate more openly (the beginnings of glasnost) and made him think that the ultimate enemy may be nukes themselves.

He didn't realize it, but Reagan viewed nukes the same way. Samuel Wells, a Cold War historian at the Woodrow Wilson Center, who has examined all the relevant documents, put it this way in a phone conversation: "His staff, for all of the first term and most of the second, kept this out of the press, but Reagan was terribly, deeply opposed to nuclear weapons—he thought they were immoral."

[…]

At their face-to-face summit of October 1986 in Reykjavik, Reagan went far beyond Gorbachev's proposal of a 50 percent strategic-arms cut. To the alarm of some aides, who were not let in on the discussion, he suggested that the two sides get rid of nuclear weapons altogether and jointly build an SDI system to guard against a nuclear revival. Gorbachev initially dismissed the idea. "I do not take your idea of sharing SDI seriously," the minutes (which were declassified by the Soviets 12 years ago) show him saying. "You don't want to share even petroleum equipment, automatic machine tools, or equipment for dairies, while sharing SDI would be a second American revolution—and revolutions do not occur all that often." Reagan replied, "If I thought that SDI could not be shared, I would have rejected it myself."[

[…]

Gorbachev wasn't the only decisive presence. If Reagan hadn't been president—if Jimmy Carter or Walter Mondale had defeated him or if Reagan had died and George H.W. Bush taken his place—Gorbachev almost certainly would not have received the push or reinforcement that he needed. Those other politicians would have been too traditional, too cautious, to push such radical proposals (zero nukes and SDI) or to take Gorbachev's radicalism at face value. (There's no need to speculate on this point. When Bush Sr. succeeded Reagan in 1989, U.S.-Soviet relations took a huge step backward; it took nearly a year for Bush and his advisers to realize that Gorby was for real.)
 
The goal seems to be keeping down the unemployment which in turn implies that less people change jobs and thus less structural change. In other words, if people spend more, it lets some companies on the border between surviving and failure survive.

Yes to some extent what you say as true, but it is certainly less damaging than direct intervention to prop up failing companies. At least the extra demand in the economy will be spent via individual consumers on the free market. Anyway, the modern welfare state to some extent automatically imposes a sort of automatic Keyensianism on the economy by making the budget go into deficit as more people draw on unemployment benefits during recessions, this is one of the reasons why recessions in the last 50 years have never been as severe as prior to that.

I agree with neo-liberals that government over-regulation of the economy slows growth, but I reject the notion that size of government per se slows growth. Just look at the Nordic nations which are virtually as economically efficient as Anglo-Saxon nations, despite having government spending at over 50% of GDP. This is because of their low level of regulation of business. Some say that the high level of public sector employment (over 30% of the workforce) is a bonus to the economy as it provides both the broader society and individual households with more stable level of demand/income, largely unaffected by the market.

On the individual household level allows more risks to be taken in terms of developing skills or allowing one spouse to start an entrepreneurial venture, without fear that the other spouse will lose their job.
 
Yes capitalism saved the USA in the Great Depression, but not laissez-faire capitalism. Government intervention in the form of the New Deal saved capitalism in the Great Depression, just look at the stronger recovery of the USA in the mid-to-late 1930's, compared to the UK, which didn't implement such policies.

What strong recovery? The US' commercial sector didn't fully recover until after the war.
 
What strong recovery? The US' commercial sector didn't fully recover until after the war.

Yes it didn't fully recover, however considering that the Great Depression hit the USA much harder than the UK, I think the fact that by 1941 the USA had substantially recovered whereas the UK didn't much at all until 1939, means that the New Deal must have had something to do with it. Despite the UK having more of a welfare state at the time, it didn't in the 1930's engage in the full Keynesianism that was a significant part of the New Deal.

I think nowadays too many people and certainly some on this thread are too willing to discount the positive effects on government intervention (ie the New Deal) and Keynesianism in particular. While I agree that it certainly was taken was taken well and truly beyond its sensible limits in the late 60's and into the 70's, it is true that during the Long Boom or Les Trente Glorieuses as the French call it, these policies did provide the best standard of living in human history before or arguably since.
 
Yes it didn't fully recover, however considering that the Great Depression hit the USA much harder than the UK, I think the fact that by 1941 the USA had substantially recovered whereas the UK didn't much at all until 1939, means that the New Deal must have had something to do with it. Despite the UK having more of a welfare state at the time, it didn't in the 1930's engage in the full Keynesianism that was a significant part of the New Deal.

The US had seemingly recovered because it was mobilizing for a damned war! The economy was still on the ropes, especially after everything fell apart again in '38.

I think nowadays too many people and certainly some on this thread are too willing to discount the positive effects on government intervention (ie the New Deal) and Keynesianism in particular. While I agree that it certainly was taken was taken well and truly beyond its sensible limits in the late 60's and into the 70's, it is true that during the Long Boom or Les Trente Glorieuses as the French call it, these policies did provide the best standard of living in human history before or arguably since.

And they all came crashing down in the 70's. Not because anything was 'taken too far', but because the market is stronger than regulations put on it. It's why we're in the situation we're in right now, and why Western economies stagnated during the 70's. The Long Boom may have been nice, but we paid the piper when stagflation hit.
 
The US had seemingly recovered because it was mobilizing for a damned war! The economy was still on the ropes, especially after everything fell apart again in '38.



And they all came crashing down in the 70's. Not because anything was 'taken too far', but because the market is stronger than regulations put on it. It's why we're in the situation we're in right now, and why Western economies stagnated during the 70's. The Long Boom may have been nice, but we paid the piper when stagflation hit.

Yes, but I don't think it can be disputed that the USA did put in place a lot of policies which could be described as broadly Keynesian well before the UK. Also, yes the USA was preparing for war, but what is Keynesian if not massive mobilisation of the military (albeit indirect Keynesianism).

Clearly you don't believe in the benefits of government intervention at all, which obviously is a valid school of thought. As someone who class themselves as a social democrat I do (I wouldn't class myself as strongly left-wing, in fact my views are very similar to 'wet' Tory views in the UK, which were quite compatible with government intervention).

I do find it interesting though that left-wingers like myself tend to idolise the economic policies of the 1950's and right-wingers tend to idolise the social/moral policies of the 1950's.
 
Yes, but I don't think it can be disputed that the USA did put in place a lot of policies which could be described as broadly Keynesian well before the UK. Also, yes the USA was preparing for war, but what is Keynesian if not massive mobilisation of the military (albeit indirect Keynesianism).

If you're talking in terms of demand stimulation, no, war doesn't work like that, at least not until after the war is over (and you're liable to do much more net damage to the world's wealth than you are going to recover).

Clearly you don't believe in the benefits of government intervention at all, which obviously is a valid school of thought.

Of course I believe government intervention can be good. Anything less is anarchist. I just think there are very few things government should ever be doing with any frequency, because government is one of very few actors in the market who is capable of making macro-economic ripples. EDIT: And there are significant sustainability problems to government run economies. My favorite example is the fact that the USSR lasted about 70 years, and yet communism is obviously a failed economic system anyway.

As someone who class themselves as a social democrat I do (I wouldn't class myself as strongly left-wing, in fact my views are very similar to 'wet' Tory views in the UK, which were quite compatible with government intervention).

I do find it interesting though that left-wingers like myself tend to idolise the economic policies of the 1950's and right-wingers tend to idolise the social/moral policies of the 1950's.

Awesome for you. I don't ascribe to left-right scales, because I blatantly don't fit on them.
 
I may catch hell for this, but here goes; I feel that the best way a capitalist system works if for the government to only play referee, let the players write the rules, and for everybody to recognize that not everyone can win. People are too obsessed with everyone winning all the time; we tried that with "Everyone in America should have affordable housing" policies, and look at the mess we're in now. Let government insure everybody plays by the same rules, let the forces of supply and demand determin winners and losers, and realize Utopia can't be legislated nor can wealth be created by government fiat. Getting people to change their mind-sets to accept this is the hard part.
 
we tried that with "Everyone in America should have affordable housing" policies

In a grand sense America's trend towards home ownership is probably a bad idea. I'd have to look up the articles to back up my point, but I will if you're interested.

However if you're talking about the 1977 Community Reinvestment Act, you're dead wrong.
 
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