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AmazonTania
17 Feb 2014 8:35 pm
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Vegas Giants' Faggoty Sok
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Silverfox » 17 Feb 2014 3:27 pm » wrote:Back to Reagan just for a moment.

A few thoughts occur to me that haven't been discussed.

First, unemployment. Lots of numbers floating about but little comment on the fact that Reagan actually changed the way unemployment was counted (in a way that still helps out today's President, ironically).
What change are you referring to? The only change to the BLS methodology since 1940 was in 1994. Prior to 1994, the BLS use to ask people if they searched for work recently. If people give the BLS one of five reasons why they haven't searched for work within the last 4 weeks, they were assumed to have given up, even though they were not asked when they last looked.

In 1994, there was greater specificity involved in the methodology, which ultimately cut the amount of discouraged workers in half. That happened during the Clinton administration, not the Reagan Administration. You can read all about it here:

http://www.bls.gov/opub/mlr/1995/10/art3full.pdf

I've noticed we've been having a bit a trouble determining when each administration starts and where it ends, but it's a bit of a stretch to assume Reagan had anything to do with this.
Second, stagflation. Volcker (and Carter) can be argued to have most of the credit for solving that, by limiting the money supply and easing the pricing of oil. This is if you accept that it was driven by oil price hikes and an expansionary monetary policy under Nixon, which many do.
The expansion of the monetary didn't start under Nixon. It started under LBJ and the guns and butter administration. To pay for all of their great social reforms, they started printing dollars at an alarming rate. This caused people to redeem their federal reserve notes for gold at an increasing rate, which was depleting the overall gold reserves held by the United States.

The monetary base was essentially stable before the 1960's.

Image

To prevent this from happening, the Nixon suspended the Bretton Wood's System, and eventually resulted in Americas' first default.
Third, Reagan benefited from a weak dollar (I recall getting two dollars for a pound in the 80s) and an oil glut (and reduced oil prices - under $30 a barrel).
While your anecdotal claims does not interest me, what weak dollar? The Dollar Index (DXY) peaked at 164.74 in 1984. Today, it's barely half of that.

Just so you know, the Dollar is weighed against a basket of major currencies (Yen, Pound, Euro, Franc, Canadian Dollar, Krona). You cannot determine the strength of it by just pairing it with one currency. All you've done was determine the strength of the dollar relative to the Pound. That's meaningless information.
Fourth, far from a reduced government, Reagan ended up with more government employees. The military spending increases (up 60%?) are indeed pumped into the economy via people's salaries.
I've already shown that most of the shortfalls in GDP was in government spending (decreased as a percentage of GDP). Whatever was pumped into the economy, it wasn't in the form of federal salaries.

This this particularly important because Government spending has the multiplier of x2, while PCE has only a x1 Multiplier. Meaning, when the government pays the salaries of its workers (as well as when these employees spend their paycheck).
Fifth, if this was all a necessary expenditure to end the Soviet Union, why was Reagan so keen on holding talks of disarmament and detente?
Who cares?
This is a guy who won the p...

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Political nonsense that doesn't interest me.
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