The Obama Nation versus the Reagan Sensation by Dale Bandy over at American Thinker
Our current economic slowdown is being called the "Great Recession." How often have you heard someone say the this economy is the worst since the Depression? The economic problems we face today are enormous, but that does not mean that the problems are unparalleled in recent decades. In terms of unemployment, the economy President Reagan faced in the early 1980s was actually worse than today's.
Unemployment, which stood at 7.8 percent when President Obama took office in January 2009, peaked at 10.0 percent near the end of that year and was at that level for just the one month.
Ronald Reagan inherited an unemployment rate of 7.5 percent in January 1981. Unemployment, which peaked at 10.8 percent in 1982, was at 10 percent or higher for ten straight months.
These numbers suggest that President Reagan faced a jobs challenge at least as great as the present one.
Our current unemployment rate (May 2012) is 8.2 percent. In May 1984, the corresponding month in President Reagan's first term, unemployment was down to 7.2 percent, a 3.6-percent drop (compared to a 1.8-percent decrease to date for President Obama). Unemployment has declined only half as much under President Obama, and it has taken us longer to get there.
Both presidents relied on budget deficits to stimulate the economy, but the similarities end there. President Reagan's deficits were much smaller. Deficits during his first term averaged 4.3 percent of gross domestic product (GDP), compared to 9.1 percent of GDP during President Obama's first term. President Obama's deficits, which have been twice as large as President Reagan's were, have produced only one half the reduction in the unemployment rate.
The differences between the two approaches go far beyond sheer magnitude. President Obama has relied primarily on expanded federal expenditures, while President Reagan utilized tax cuts. Federal expenditures during President Obama's first term have averaged 24.4 percent of GDP, compared to 22.8 percent during President Reagan's first term. Deficits at today's levels have not been seen since World War II.
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