The Recession and the National Debt Are Separate Problems

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in the USA and several other nations is tax on high-end net income (including capital gain) that is far higher than present level. The government does not need to stop spending. It needs to start really collecting. There is no reason for a smaller and smaller tiny percentage of people to be gathering (and keeping) 90% of the wealth in the nation. Income tax is the fix for this. Not value-added tax, not sales tax, not property tax-----INCOME TAX, and plenty high. Tired of Limbaugh setting your national agenda? Me too. Why isn't he paying 90% like he would have been under even Republican Dwight Eisenhower?

Muser of NM 11:57PM June 28, 2010

Reagan's "seven fat years," as conservative supporters proudly call it (1983-1990), cannot be credited to supply side economics but rather to support for massive deficit spending, mostly on the military budget. Even then, when annual GDP growth is averaged out of the course of the entire business cycle (1980-90) we only have about 3.1% average annual growth rates. We also have an annual average of deficits that amounted to nearly 4.5% of GDP (despite a fairly strong expansion phase).
Another factor that contributed to US recovery was that the high interest rates, though temporarily depressing on economic growth and employment, attracted massive amounts of foreign direct and financial investment which strengthened the dollar, held down inflation and ultimately led to renewed domestic business investment. After 1985, US exports grew as the world economy recovered to some limited extent. US export sector wage rates, according to a recent Peterson Institute study, tend to be about 10% above the national average. This also expanded spending and growth.
The US economy has always relied on deficit spending as a path to recovery as well as to sustain stable growth. It is disingenuous to act as though deficits were some kind or anomaly or short to medium term problem.

steve of IL 6:25PM June 28, 2010