Tuesday, November 02, 2010

Difference Between Reagonomics & Obamanomics

I previously pointed out that during the first 5 quarters of this so called recovery, real per capita personal income actually fell.

One can compare this to what happened after another deep recession, that of 1981-82 ended.

In the 5 quarters after the supposed end of this recession in Q2 2009, real per capita disposable income developed this way including and excluding transfer payments (Social security, unemployment benefits, welfare etc.) from the government:

Including transfer payments: -0.7%
Excluding transfer payments: -1.4%

By contrast, when the 1981-82 recession ended in Q4 1982, we this development of real per capita disposable income in the 5 quarters that followed:

Including transfer payments: +6.3%
Excluding transfer payments: +6.0%

This difference illustrates just how failed Obama's government expansion strategy has been compared to Reagan's marginal tax rate reduction strategy.