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9. If you like Social Security…..thank Ronald Reagan
"By cutting tax rates, Reagan was able to fund a 50 percent increase in defense spending. This expansion of the military was crucial to winning the Cold War. Social spending also grew by some 25 percent—although I should hasten to add that Reagan sharply reduced the nation’s debt by negotiating a Social Security Commission regime that extended the age of retirement and cut back the implicit liabilities in the Social Security program by some six trillion dollars. These reforms radically improved the fiscal position of the government compared to the 1970s, when real Social Security liabilities doubled.
Reagan knew that all government spending ultimately depends on the output and assets of the private sector. While the federal budget deficit (exclusive of Social Security) swelled under Reagan in absolute terms as he confronted the Soviet Union in the Cold War, the federal debt shrunk sharply as a share of national assets.
Meanwhile, with the top tax rate dropping from 50 to 28 percent under Reagan, tax contributions by the top five percent of earners rose from nine to 18 percent of the total, while contributions from the bottom 20 percent dropped from six to two percent. The top 50 percent of taxpayers paid 94.5 percent of the federal income taxes. Lower tax rates resulted in much larger tax payments by the rich. Reagan’s economic policies proved to be so popular that they were extended, for the most part, under President Clinton and a Republican Congress.”
"By cutting tax rates, Reagan was able to fund a 50 percent increase in defense spending. This expansion of the military was crucial to winning the Cold War. Social spending also grew by some 25 percent—although I should hasten to add that Reagan sharply reduced the nation’s debt by negotiating a Social Security Commission regime that extended the age of retirement and cut back the implicit liabilities in the Social Security program by some six trillion dollars. These reforms radically improved the fiscal position of the government compared to the 1970s, when real Social Security liabilities doubled.
Reagan knew that all government spending ultimately depends on the output and assets of the private sector. While the federal budget deficit (exclusive of Social Security) swelled under Reagan in absolute terms as he confronted the Soviet Union in the Cold War, the federal debt shrunk sharply as a share of national assets.
Meanwhile, with the top tax rate dropping from 50 to 28 percent under Reagan, tax contributions by the top five percent of earners rose from nine to 18 percent of the total, while contributions from the bottom 20 percent dropped from six to two percent. The top 50 percent of taxpayers paid 94.5 percent of the federal income taxes. Lower tax rates resulted in much larger tax payments by the rich. Reagan’s economic policies proved to be so popular that they were extended, for the most part, under President Clinton and a Republican Congress.”
Ronald Reagan and the Spirit of Free Enterprise - Imprimis
Reagan tapped the creativity of America’s entrepreneurs to bring about a global, not just a national, economic revolution.
imprimis.hillsdale.edu