Entry in progress—B.P.
Wikiquote: George H. W. Bush
George Herbert Walker Bush (born June 12, 1924) was the forty-first President of the United States. He is married to Barbara Bush, and is the father of George W. Bush.
It just isn’t going to work, and it’s very interesting that the man who invested this type of what I call a voodoo economic policy…
. Speech at Carnegie Mellon University (10 April 1980), allegedly referring to Ronald Reagan
Reaganomics ( /reɪɡəˈnɒmɪks/; a portmanteau of Reagan and economics attributed to Paul Harvey) refers to the economic policies promoted by the U.S. President Ronald Reagan during the 1980s, also known as supply-side economics, or pejoratively as voodoo economics or trickle-down economics. The four pillars of Reagan’s economic policy were to:
. Reduce government spending increase
. Reduce income tax and capital gains tax
. Reduce government regulation of economy
. Control money supply to reduce inflation
According to William A. Niskanen, one of the architects of Reaganomics, “Reagan delivered on each of his four major policy objectives, although not to the extent that he and his supporters had hoped,” and notes that the most substantial change was in the tax code, where the top marginal individual income tax rate fell from 70.1% to 28.4%, and there was a “major reversal in the tax treatment of business income,” with effect of “reducing the tax bias among types of investment but increasing the average effective tax rate on new investment.” Roger Porter, another architect of the program, acknowledges that the program was weakened by the many hands that changed the President’s calculus, such as Congress.
The primary effect of the tax changes over the course of Reagan’s term in office was a change in the composition of tax revenue, towards payroll and new investment, and away from higher earners and capital gains on existing investments. Federal revenue share of GDP declined from 19.6% in fiscal 1981 to 17.3% in 1984, before climbing back to 18.4% by fiscal year 1989. Personal income tax revenues fell during this period relative to GDP, while payroll tax revenues rose relative to GDP. President Ronald Reagan’s 1981 cut in the top regular tax rate on unearned income reduced the maximum capital gains rate to only 20%--its lowest level since the Hoover administration. This tax benefits the wealthy, however, in 1986 President Reagan set tax rates on capital gains at the same level as the rates on ordinary income like salaries and wages, with both topping out at 28 percent.
Before Reagan’s election, supply side policy was considered unconventional by the moderate wing of the Republican Party. While running against Reagan for the Presidential nomination in 1980, George H. W. Bush had derided Reaganomics as “voodoo economics”. Similarly, in 1976, Gerald Ford had severely criticized Reagan’s proposal to turn back a large part of the Federal budget to the states. Reagan’s policies have become widely accepted by many Republicans.
Definition of ‘Voodoo Economics’
A slanderous term used by George H. W. Bush in reference to President Ronald Reagan’s economic policies, which came to be known as “Reaganomics”.
New York City • Banking/Finance/Insurance • (0) Comments • Thursday, February 23, 2012 • Permalink