The Instigator
frankienstien
Pro (for)
Losing
0 Points
The Contender
progressivedem22
Con (against)
Winning
16 Points

Reganomics applied over the last 30 years

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Post Voting Period
The voting period for this debate has ended.
after 3 votes the winner is...
progressivedem22
Voting Style: Open Point System: 7 Point
Started: 2/12/2014 Category: Politics
Updated: 3 years ago Status: Post Voting Period
Viewed: 1,086 times Debate No: 45780
Debate Rounds (5)
Comments (4)
Votes (3)

 

frankienstien

Pro

I think if you really want a strong economy, you need the government interference not to exist. Everyone in the USA could be rich if the government didn't cripple the economy and give trillions of dollars of taxpayers to other countries.
progressivedem22

Con

Even though Pro hasn't answered my questions, I'll accept this debate.

First, I'd like to ask for clarification on his latter point: that we "send trillions of dollars of taxpayers [money] to other countries." Please source this comment, because so far as I know, it's completely inaccurate. If you're talking about foreign aid, please note that foreign aid accounts for about 1 percent of the federal budget [1], which isn't even close to "trillions." Moreover, a lot of that money is spent on domestic goods, which provides a direct stimulus to the U.S.

Next, he's referring to "Reaganomics"--the principle of which is inclusive of cutting taxes and spending, lowering inflation, deregulating, and increasing military spending [2]. However, Ronald Reagan himself didn't follow this model to a tee. Ronald Reagan raised taxes 11 times as President, and signed the " largest tax increase in the history of any state up till then" as Governor of California [3], tripled the federal budget deficit [4], and employed more government workers than President Obama [5]. Moreover, after he passed his tax cuts in 1981, unemployment rose to 10.8 percent [6]. Moreover, his tax cuts did not raise federal revenue, contrary to the conservative narrative, nor is there any evidence linking them to job growth; he was never able to recover the deficits he accumulated.

Also, his initial premise can be disproved if I can provide a counterexample. In fact, we've had a strong economy when there was significant government interference. Following WWII--which, in conjunction with the New Deal, ended the Great Depression [7][8]--for about three decades, tax rates were between 70 and 91% [9], yet the economy grew 37% during the 1950s under Dwight D. Eisenhower, which can be attributed largely to the G.I. Bill and investments in science and technology, as well as the Interstate Highway [10]. He also managed to balance the budget, which Reagan never managed to accomplish.

Now that I'd proven that the Keynesian system I would advocate was demonstrably successful, let's step back and examine "Reaganomics." Does it actually work? It depends on how you view it. Indeed, military spending--often called "weaponized Keynesianism"--managed to bring us out of WWII and contribute to growth under Reagan. Does that not violate the core tenets of this principle, though? My opponent is arguing against government interference, asserting that no economy could prosper if the government intervenes actively. His argument is not "the government should only stimulate the economy through military spending." If military spending has a stimulative effect, would the same principle extend to other areas of government? Yes. AARP reported that Social Security, for instance, supported 9.2 million jobs and about $1.4 trillion in economic output in 2012 [11], and generates about $2 in economic output for every $1 paid out [12].

Reagan's rhetoric reflected the principle that tax cuts spur growth, and thus raise revenue, so if we raise taxes, we'll shrink revenue. None of these are true, however. A study from the Economic Policy Institute demonstrates that the revenue maximizing effective tax rate on the wealthy is, actually, 68.7% percent [13]. Moreover, it demonstrates that since WWII, high tax rates have had no significant on economic growth, including investment, private savings, productivity, et al. A Congressional Research Service study came out with similar results, holding that tax rates since 1945 have had no material effect on savings, investment, and productivity, but have increased income inequality [14]. That's an important issue, actually, that I think we ought to explore more.

To that end, here's an important graph I think we should consider from the Stanford Center on Poverty and Inequality [16]:



This chart is the manifestation of income inequality, and thoroughly refutes the essence of trickle-down economics--the notion that, as the affluent do better, their wealth trickles down to middle-income and poor people. It hasn't, however. The top 20% have been doing better, while the bottom 60% has been doing worse and worse. But the chart shows something else. For a point, distribution was income was fairly equitable. Where does it begin to separate? Right around the late 1970s, and then is blown nearly out of proportion following the 1980s, that is, Ronald Reagan's presidency. Let's view a few more graphs, shall we?

Let's also consider hourly wages relative to productivity gains [17]. What we learn is that, though productivity has nearly doubled, wages have stagnated and fallen amid the Recession. A Sentier Research report, published in January 2012, notes a 7.8% decline in wages since the crisis began [18]. At the same time, 95% of the gains of the 2009 recovery went to the top 1 percent of income earners [19].

I'd like to make one more point before I conclude this argument--and I know that I didn't get to deregulation or inflation, but hopefully we can address those in later arguments. Not only have an inordinate amount of the gains over the past 30-odd years gone to the very affluent, which ought to have "trickled-down" by Reagan's model. Also, conservatives today will cite Reagan in order to argue for even more tax cuts. However, tax rates on the very affluent today are near historic lows. I'd like to direct your attention to yet another chart [20]:



Let us also not forget corporate tax rates--and, by the way, 1 out of 4 corporations pay no federal taxes [21]. Moreover, there has been a study conducted showing that 78 out of the 280 companies reviewed pay either 0% in federal taxes, or even less , despite earning $156 billion in pre-tax profits [22]. Here's the trend for corporate tax rates [23]:



That's enough for now. Back to Pro.

Sources:
Debate Round No. 1
frankienstien

Pro

Okay, we can all agree billions of dollars are handed out. "Trillions" includes the cost of wars/ intervention in other countries, and from the money the government pays in interest on because it has to borrow the money in the first place.
progressivedem22

Con

You have still yet to prove the following:

(1) that "trillions" are literally spent overseas, or to specify exactly where that money came from
(2) why "Reaganomics" would seek to prevent trillions from being spent overseas, if you're speaking of wars, because Reaganomics calls for more military spending; even though Reagan himself could be seen as center-left on foreign policy--or at least I would consider him as much--Republicans after him, e.g., Mitt Romney, have been largely pro-war. Therefore, it is your policy, ipso facto, that calls for money being spent in wars.
(3) that the "trillions" that are spent for wars--and, yes, wars are expensive--went overseas primarily, as opposed to defense contractors, who seem to like people--Republicans and Democrats--who fearmonger.
(4) that your policy will "allow everyone to become rich," when I've demonstrated to you that, as the rich have become richer, everyone else has become, for the most part, worse off.

Moreover, you haven't addressed my criticisms of your policies at all. So I will only say this, and will extend my arguments from this point, until I have a point of yours to rebut.
Debate Round No. 2
frankienstien

Pro

I don't think it is fair to use time lines. I believe when the rich have control of the money, they create more money and we are all better off in the end. The poor keep getting poorer for reasons such as overpopulation, or perhaps free trade agreements with countries where the workers can't compete.

Spending on military doesn't have to equate to wars, or the price we pay for them. I think it becomes a fine balancing act that when one has weapons far superior, wars are avoided.

I guess I'm lost in the debate as to what one thinks of when you say "Reganomics". Regan was most noted for the trickle down economic phrase, so I equate that with Regonomics. He also spent huge sums of money the government didn't have on military, and I don't see that as sustainable.
progressivedem22

Con

"I believe when the rich have control of the money, they create more money and we are all better off in the end."

Feel free to believe this. But the problem is, you haven't proven it. I've provided evidence to the contrary, which you haven't rebutted. The rich have control of most of the wealth in the United States, and yet most people are still worse off as a result. Your model has been tried, and has failed, as I have thoroughly demonstrated in my opening argument.

"The poor keep getting poorer for reasons such as overpopulation, or perhaps free trade agreements with countries where the workers can't compete."

Actually, the poor keep getting poorer because they can't donate to politicians for tax breaks. They keep getting poorer because Ronald Reagan et al. cut social programs that benefit them because he deemed them "welfare queens." The poor keep getting poorer because the federal minimum wage is only $7.25 an hour, and multinational corporations like Wal-Mart won't pay a living wage. Therefore, they depend on food stamps and welfare for their survival, and are thus subject to GOP-imposed budget cuts. In such a way, corporations like Wal-Mart and McDonalds are the biggest welfare queens in this country.

Also, your economic policy of Reaganomics compels you to endorse free trade agreements -- that's part and parcel of "less regulation." Less regulation includes fewer barriers to trade. So if your contention is that free trade agreements lead to poverty, you're conceding the debate.

"Spending on military doesn't have to equate to wars, or the price we pay for them. I think it becomes a fine balancing act that when one has weapons far superior, wars are avoided."

That's quite true, but we already spend more on the military than every other industrialized country combined.

Is your contention that military spending creates jobs? If so, does that not undermine your contention that government interference is bad for the economy? And why should we spend more on the military, but not on programs that help consumers, who are the real job creators in this country?

"I guess I'm lost in the debate as to what one thinks of when you say "Reganomics""

First of all, it's "Reaganomics." Second, I gave you the textbook definition in my first argument: it involves lower spending, lower taxes, lower inflation, less spending on social programs, more spending on the military, and deregulation. To support Reaganomics--which your position as Pro compels you to do --you must defend all of these policies.

"Regan was most noted for the trickle down economic phrase, so I equate that with Regonomics."

It is quite true that "trickle-down" has become synonymous with Reaganomics.

"He also spent huge sums of money the government didn't have on military, and I don't see that as sustainable."

But that's part and parcel of Reaganomics. If you're claiming that increasing military spending is unsustainable, you're conceding that Reaganomics is unsustainable.
Debate Round No. 3
frankienstien

Pro

frankienstien forfeited this round.
progressivedem22

Con

Extending.
Debate Round No. 4
frankienstien

Pro

I'm not sure how I prove trillions have been spent overseas, but I know the Iraq and Afghan operations cost the country around 2 trillion based on C.B.O. estimates alone. All US citizens see for it is a destabilized Iraq, that now might pose a threat in terms of terror. How much aid do we give to Egypt, Libya and down the line. Yes ,some of the aid given to countries over seas creates jobs, but one could easily assume that if the money were left in the taxpayer's hands, they would spend it on something creating a stronger economy. Our government seems to believe in the " broken window economic strategy" when it come to war logic and military spending.

I'll stand by my opinion that the rich are better with money, and that is how most of them got there. When they have the money to invest we all have more in the end.

As far as deficit spending goes, it can be a good thing or a bad thing. Reagan brought the National debt to a trillion on cold war military spending. I would say it was reasonable to do so then, but now it is 16 trillion and we have everything we already really need.
progressivedem22

Con

The problem is, you cannot have your cake and eat it, too. You cannot, on one end, argue that military spending -- a core tenet of Reaganomics -- is foolish and unsustainable, and then endorse it under certain circumstances. You cannot make a claim about trillions of dollars spent overseas that you cannot back up with factual evidence, and hold that, if only we reversed this hypothetical scenario, everything would be great.

In essence, your argument has several different facets to it. But you have not defended Reaganomics. You conceded on increased military spending and deregulation -- you did the latter when you argued against free trade agreements. From that point, Reaganomics nearly collapses, because those were the core actions that Ronald Reagan actually carried out. Recall that, as I pointed out in Round 1, Ronald Reagan raised taxes 11 times as President and signed a rather significant tax hike as Governor of California. Your job as Pro was to defend Reaganomics, and you have abdicated that role by arguing against it. We can even agree on military spending, but that's not the position that you can take as Pro.

But let's get back to your central argument, You keep saying that, in your opinion, we are all better off if rich people have more money. You haven't provided even a modicum of evidence to this end. I gave you evidence saying that, essentially, the rich do in fact have most of the wealth in this country, and yet many people are still very poorly off. I pointed to a time in history -- the three decades following WWII -- where tax rates were as high as 91%, and yet the economy boomed. Moreover, I provided sources, such as a Congressional Research Service study, which concluded that tax cuts do not generate economic growth. When we review the terms of Ronald Reagan and George W. Bush, the case becomes increasingly clear: the wealthy are not the job creators; middle-income consumers are. Even at a time when tax rates are near historic lows, the very affluent are sitting on literally $2 trillion in capital that they are not investing because there is not adequate demand in the economy. That is the chief problem that we face, and Reaganomics is an obstacle to this end. We have tried it again and again, and it has continuously failed. I think it is time for new ideas.
Debate Round No. 5
4 comments have been posted on this debate. Showing 1 through 4 records.
Posted by progressivedem22 3 years ago
progressivedem22
Oh. nevermind, they're there, you just need to scroll to the right haha.
Posted by progressivedem22 3 years ago
progressivedem22
Your messaging option is disabled, but I have a few questions for you before I accept this debate:

1. Structure? You posted a few arguments in your opening statement. Should I assume that I should follow suit with my first argument, or should I merely accept and briefly outline my points?
2. The character limit is only 8,000 characters. Could we change it to 10,000?
3. I think we should define "Reagonomics." Are we defining it in terms of the economic policies of Ronald Reagan, or in terms of the principles that it was based on? -- low taxes, less spending, low inflation, increased military spending. Obviously, Ronald Reagan himself didn't follow this completely through.
3 votes have been placed for this debate. Showing 1 through 3 records.
Vote Placed by Actionsspeak 3 years ago
Actionsspeak
frankienstienprogressivedem22Tied
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Total points awarded:03 
Reasons for voting decision: A round was forfeited, and their was no sources,
Vote Placed by iamanatheistandthisiswhy 3 years ago
iamanatheistandthisiswhy
frankienstienprogressivedem22Tied
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Total points awarded:07 
Reasons for voting decision: Clear winner in this debate. Con made arguments, which were backed by facts. In contrast Pro made a few belief statements with no facts. As such arguments and sources to Con. Conduct points have to go to Con as Pro forfeited a round of the debate. Lastly, S&G must go Con, as Pro made these vague run on sentence statements.
Vote Placed by yay842 3 years ago
yay842
frankienstienprogressivedem22Tied
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Total points awarded:06 
Reasons for voting decision: Pro's arguments were really short and were not supported with any sources, he also forfeited a round and had poor rebuttals as Con actually used sources, facts, and much argumentation