Are our current economic challenges Ronald Reagan’s (President of the United States from 1980 to 1988) fault?
That’s the provocative claim being advanced by Nobel Prize winning economist Paul Krugman in. You can read the entire piece from the New York Times here.
According to Krugman, Reganomics sowed the seeds that grew into today’s financial disaster. He writes:
“Reagan-era legislative changes essentially ended New Deal restrictions on mortgage lending — restrictions that, in particular, limited the ability of families to buy homes without putting a significant amount of money down.”
Krugman traces Reagan’s bailout of the savings and loan industry to the growth of debt by both the government and the general population.
“Traditionally, the U.S. government ran significant budget deficits only in times of war or economic emergency. Federal debt as a percentage of G.D.P. fell steadily from the end of World War II until 1980. But indebtedness began rising under Reagan; it fell again in the Clinton years, but resumed its rise under the Bush administration, leaving us ill prepared for the emergency now upon us.”
Is Krugman right? Did the champion of modern capitalism inadvertently sabotage it decades later? Did Reagan enable this country’s materialistic bender?
Or is Mr. Krugman engaging in revisionist history?
Me? Well… Just because you can lead a horse to water does not mean he needs or has to drink it. While in college from 1980 to 1984 I was working my way through school, busting my butt, saving every penny I could, and building a small company.
What do you think?
Peace be to my Brothers and Sisters.
brian patrick cork