Reaganomics Redux and the Global Economy
It has been less than a year since US President Donald Trump and congressional Republicans enacted a massive tax cut, following in the footsteps of former President Ronald Reagan during his first term. And, as was true in the 1980s, fiscal stimulus in the US is being felt worldwide, and not in a good way.
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MUNICH – Will history repeat itself? When US President Ronald Reagan assumed office in 1981, he lowered the maximum corporate and personal income tax rates, and allowed companies to write off capital expenditure depreciation almost instantly. Reagan described this tax package, combined with a larger effort to deregulate the economy, as a supply-side policy, when it was actually the largest Keynesian stimulus program in history (at the time).