The Ronald Reagan Ultimate Legacy will be the following:
During Ronald Reagan’s two-term in office (8 years), the US government added another $ 1.7 trillion to the cumulative total debt of the US government. That $ 1.7 trillion dollar debt it is equivalent to $ 2.5 - $ 3.0 trillion dollars in today’s money.
The real legacy of Ronald Reagan to future American generations is a legacy of debt; lots of debt. He left a very large outstanding bill for future American generations to pay it.
He wasted a large chunk of that money in defense spending at a time when the economy of the Soviet Union was in the process of imploding, and in the way to a total financial collapse.
What Americans have today to show for as a result of Reagan’s massive defense spending? Besides a very large outstanding government debt, Americans also have a bunch of toys and obsolete military technology.
As far as I know the only result of all that spending is a pile of debt sky-high that it will be left behind for future generations to deal with. (Since most of the armament bought in the 1980’s must be completely obsolete by now.)
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The Ronald Reagan Ultimate Legacy
As of 06/30/1968 the US Government cumulative outstanding debt was $347,578,406,425.88 - ($ 348 billion US dollars)
As of 12/31/1980 the US Government cumulative outstanding debt was $930,210,000,000.00 – ($930 billion US dollars) - Note: Ronald Reagan – 1st term started on January 1981
As of 01/23/08 the US Government cumulative outstanding debt is $ 9,195,107,304,086.00 – ($ 9.2 trillion US dollars)
The cumulative US national debts were only $ 930 billion dollars as of December 31, 1980 - right before Ronald Reagan became president of the United States. Here is the detail of the additions to the US national debt by president:
Ronald Reagan (8 years in office) added to US debt $ 1.7 trillion dollars.
George Bush Senior (4 years in office) added to US debt $ 1.5 trillion dollars.
Bill Clinton (8 years in office) added to US debt $ 1.6 trillion dollars.
George Bush Junior (first term, 4 years in office) added to US debt $ 1.8 trillion dollars.
George Bush Junior (second term, 4 year in office) added to US debt about $ 2.2 trillion dollars. (Estimated deficit for 2008 can be even higher when the final numbers are in.)
Source: US Department of the Treasury – Bureau of the Public Debt
And US Department of Commerce - BEA – Bureau of Economic Analysis
The Bush administration total budget expenditures during the 8-year period would be US$ 20 trillion dollars – and from that total 20 percent or about US$ 4 trillion dollars were wasted in defense spending during that time – in the past that kind of level of defense spending it did generate inflation in the United States as it was the case during the Vietnam War and the years following the end of that war.
Under normal circumstances inflation would already be growing faster in the United States. Today we are just pushing forward the same type of inflation by borrowing lots of money from foreign sources and also by buying everything in sight from China and in that manner we keep the prices in check in the US economy – at least for a while.
But the day of reckoning it is not far in the future when foreigners are going to demand from the US government a higher rate of return because of the declining value of the US dollar in world markets. Then interest rates it will go up in the United States and US government borrowing will push the US interest rates even higher – at the same time foreign goods become more expensive in US dollars and in turn helping push inflation even further on its way up.
Since December 31, 1980 the Republican presidents added $ 7.2 trillion dollars to the cumulative US national debt, and the Democratic president added $ 1.6 trillion dollars.
The Republican administrations added 82 percent of the new US national debt since December of 1980, and the Democratic administration added only 18 percent of the new debt. Since December 31, 1980 the United States had only one fiscally responsible president - former president Bill Clinton - a democrat.
Things to keep in mind:
In 1968 the total US population was around 190 million people and the number of people over 65 years old was a manageable number.
In 2007 the total US population has reached a level over 300 million people and the number of people over 65 years old is increasing very fast year after year – Today the total number of people over 65 years old is around 40 million people. And in the coming years this group of people will rise very fast and it will reach 75 million people, but the bad news is that the population over 85 years old is supposed to explode in the coming years.
There is a liability attached to the baby boom generation to the tune of another $ 50 to $70 trillion US dollars – and this liability is coming due in the near future.
In 1968 we had a complete different world economy than we have in 2008.
In 1968 the communist countries were operating outside the international monetary system – China, the Soviet Union and its satellite countries did not have an impact in the international monetary system – for example such as the Impact that China has on the international monetary system and the global economy of today.
In 1968 we can compare the US economy with a "Circle Line" boat that goes around Manhattan full of happy people.
In 2008 we can compare the US economy with the "Titanic" right before that ship hit the iceberg.
Today, this is a very realistic analogy for the US dollar.
Republican Party mantra: "Debt does not matter" government policy.
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