Reagan and Keynes

[DallasCowboys]

Hey all,

I was in class today and the topic was Reagan. My teacher being pretty liberal began class by going on this tirade against Reagan and I was gonna lose it, he was claiming Reagan was a Keynes supporter and I was just about to fire back but I decided to do some research first and what I found kinda shocked me. I found this article http://mises.org/library/myths-reaganomics

and I slowly began to realize two things upon further research.1. I don't understand why conservatives support Reagan, his policies are pretty far from conservative ideals. 2. I don't think I can find a time period in the last 60 years where the American economy was truly free. My question really is this, did the American economy really recover in the 1980's or just we just let the debt continue to rise and ignore it?

Thanks,

David C.

[merjet]

My question really is this, did the American economy really recover in the 1980's or just we just let the debt continue to rise and ignore it?

The U.S. economy did much better in the 1980s than the 1970s. Real GDP numbers can be found here. Some of the growth was due to government spending. Rothbard was correct about federal government deficits during the Reagan years. Deficit numbers can be found here.

Much of the improvement was due to the Federal Reserve, Paul Volker in particular. Inflation got much higher in the 1970s and reached about 13% in 1980. Fed policy, led by Volker, reduced inflation to about 4% by 1984. Volker was appointed by Carter, not Reagen. Also, the effect of the deficits on the U.S. economy were much mitigated due to inflows of foreign capital.

[DallasCowboys]

My question really is this, did the American economy really recover in the 1980's or just we just let the debt continue to rise and ignore it?

The U.S. economy did much better in the 1980s than the 1970s. Real GDP numbers can be found here. Some of the growth was due to government spending. Rothbard was correct about federal government deficits during the Reagan years. Deficit numbers can be found here.

Much of the improvement was due to the Federal Reserve, Paul Volker in particular. Inflation got much higher in the 1970s and reached about 13% in 1980. Fed policy, led by Volker, reduced inflation to about 4% by 1984. Volker was appointed by Carter, not Reagen. Also, the effect of the deficits on the U.S. economy were much mitigated due to inflows of foreign capital.

Thank you this pretty much answered my question.