Do you think the U.S.A. will ever recover from the damage done to it by Ronnie Reagan?

USA will

Baby Boomer won't

What do you do when you want to screw only the working people of your nation with the largest tax increase in history and hand those trillions of dollars to your wealthy campaign contributors, yet not have anybody realize you've done it? If you're Ronald Reagan, you call in Alan Greenspan.

Through the "golden years of the American middle class" - the 1940s through 1982 - the top income tax rate for the hyper-rich had been between 90 and 70 percent. Ronald Reagan wanted to cut that rate dramatically, to help out his political patrons. He did this with a massive tax cut in the summer of 1981.

The only problem was that when Reagan took his meat axe to our tax code, he produced mind-boggling budget deficits. Voodoo economics didn't work out as planned, and even after borrowing so much money that this year we'll pay over $100 billion just in interest on the money Reagan borrowed to make the economy look good in the 1980s, Reagan couldn't come up with the revenues he needed to run the government.

Coincidentally, the actuaries at the Social Security Administration were beginning to get worried about the Baby Boomer generation, who would begin retiring in big numbers in fifty years or so. They were a "rabbit going through the python" bulge that would require a few trillion more dollars than Social Security could easily collect during the same 20 year or so period of their retirement. We needed, the actuaries said, to tax more heavily those very persons who would eventually retire, so instead of using current workers' money to pay for the Boomer's Social Security payments in 2020, the Boomers themselves would have pre-paid for their own retirement.

Reagan got Daniel Patrick Moynihan and Alan Greenspan together to form a commission on Social Security reform, along with a few other politicians and economists, and they recommend a near-doubling of the Social Security tax on the then-working Boomers. That tax created - for the first time in history - a giant savings account that Social Security could use to pay for the Boomers' retirement.

This was a huge change. Prior to this, Social Security had always paid for today's retirees with income from today's workers (it still is today). The Boomers were the first generation that would pay Social Security taxes both to fund current retirees and save up enough money to pay for their own retirement. And, after the Boomers were all retired and the savings account - called the "Social Security Trust Fund" - was all spent, the rabbit would have finished its journey through the python and Social Security could go back to a "pay as you go" taxing system.

Thus, within the period of a few short years, Reagan dramatically dropped the income tax on America's most wealthy by more than half, and roughly doubled the Social Security tax on people earning $30,000 or less. It was, simultaneously, the largest income tax cut in America's history (almost entirely for the very wealthy), and the most massive tax increase in the history of the nation (which entirely hit working-class people).

But Reagan still had a problem. His tax cuts for the wealthy - even when moderated by subsequent tax increases - weren't generating enough money to invest properly in America's infrastructure, schools, police and fire departments, and military. The country was facing bankruptcy.

No problem, suggested Greenspan. Just borrow the Boomer's savings account - the money in the Social Security Trust Fund - and, because you're borrowing "government money" to fund "government expenditures," you don't have to list it as part of the deficit. Much of the deficit will magically seem to disappear, and nobody will know what you did for another 50 years when the Boomers begin to retire 2015.

Reagan jumped at the opportunity. As did George H. W. Bush. As did Bill Clinton (although Al Gore argued strongly that Social Security funds should not be raided, but, instead, put in a "lock box"). And so did George W. Bush.

The result is that all that money - trillions of dollars - that has been taxed out of working Boomers (the ceiling has risen from the tax being on your first $30,000 of income to the first $90,000 today) has been borrowed and spent. What are left behind are a special form of IOUs - an unique form of Treasury debt instruments similar (but not identical) to those the government issues to borrow money from China today to fund George W. Bush's most recent tax cuts for billionaires (George Junior is still also "borrowing" from the Social Security Trust Fund).

Former Bush Junior Treasury Secretary Paul O'Neill recounts how Dick Cheney famously said, "Reagan proved deficits don't matter." Cheney was either ignorant or being disingenuous - it would be more accurate to say, "Reagan proved that deficits don't matter if you rip off the Social Security Trust Fund to pay for them, and don't report that borrowing from the Boomers as part of the deficit."

I assume you mean the 40th President of these United State's son Ronnie Reagan. I just assume you wouldn't slander the greatest president since yours truly to grace the oval office. Anyhow, yes I am sad that Ronnie Reagan has chosen a life of debauchery and dog shows, instead of following in the great ones footsteps, but I would hardly say that this young chap "Damaged the USA" you are being a "trifle" harsh.

in short I disagree. right this is a quick record. Punishing job makers in simple terms decreases jobs made. while the rustic mandatory a frontrunner Reagan grew to become right into a guy that stood up and led. Did he might desire to better than practice that u.s. grew to become into to no longer toyed with? I say no. because of the fact of this they dared no longer shop the hostages after his inauguration. yet he did greater did no longer he. shopper spending and self belief grew to become into at one its maximum ranges ever in this u . s . a .. we'd desire to ask why. i think of the respond is obvious although. all of us had jobs. Jobs that payed nicely ans jobs that have been maintain. So spending grew to become into extreme. oh wait he did even better than than that. He extra the tip of the chilly conflict. We observed the U.S. bypass republic and the berlin wall grew to become into torn down. we could see what did the banana head in workplace do? Oh yeah larger government dependence so as that the conventional guy or woman had to be conscious for and shelter government help. this is appropriate he's a sturdy chief. He led the conventional American to government dependence.

Reagan actually used the California Jarvis Anti-Tax initiative as a model after he realized he could buy votes from the public and campaign donations from Wall Street by promising tax cuts.

Problem is, CALIFORNIA IS ONE OF THE MOST BANKRUPT STATES IN THE UNION, and all because of Jarvis, which has in turn led to the UNITED STATES being one of the most bankrupt countries in the world.

The only thing we have left is our land, and I actually expect us to lose Alaska and Hawaii at some point to pay off our massive debt, which started under Reagan, and flowered under Bush.

Obama hasn't lowered it yet, but he will once the idiotic tax cuts have been allowed to expire, which we'd better all PRAY he has the bravery and intelligence to do!

Why is it when America created wealth you liberals called it greed.You cried when unemployment was around 4%.Now that it is 17%, you keep hammering Reagan. Who has not been in office for 22 years. I think that secretly you are still pissed off at him for bringing down your communist utopia, the soviet union.

Reagan did some good things (the SDI, doubling of import tariffs, etc.), but he was ultimately too brainwashed by the sophistries of the Chicago School fascists to be very successful. He was much better than either of the Bush's or Obama, however.

Oh my GOD...you can't keep blaming BUSH and run out of material so now you start on REGAN? MAN..this is 2010! 2010! BOZO HAS TO BE RESPONSIBLE SOMETIME IN HIS LIFE. YOu do believe he is a MAN don't you? That means grown up and adult. That means you do not have to defend him by making yourself look idiotic! Goodness...don't demean yourself so much..the man isn't worth it.

I realize your party has nothing to be proud of..and you can't discuss facts....but please...don't disgrace yourself like that. YOU ARE SPECIAL!

That evil so and so made it so easy get ahead that millions of greedy people actually tried to do it. Imagine that. He should have just kept them unemployed and dependent on the govt like the dims have done.

Yes, way down the road.

Let the man rest in peace for Gods sake !! You really have no concept of what you are talking about.