Sometimes the strangest things happen. About a week ago a woman called my business
and talked to my son, he was working the phone, and does sales and book keeping.
She wanted to know if we were still in business. Then she went on to tell this strange
but interesting story.
"My grandmother died. We were going through her things, she was a real packrat and
collected newspapers and magazines. I came across a Local paper with an article about
your business, the date is January 31, 1983. I just was curious if you were still
My son assured her we were still in business, in fact celebrating our 30th year. Although
it has been really tough the last 3 years. But then she went on to tell my son all the
other papers her grandmother had. LIke the front page when the Titanic sank. Or
it happened her grandmother was in Dallas when JFK was shot. She had that
Also since this is Alabama, she had multitudes of papers with every article about the
beloved Bear Bryant (The most famous coach in Alabama history.) I actually saw one
game when the Bear was coach. He never left the 50 yard line. And when the stands
did that ROLL TIDE thing, I was really impressed.
But I digress from the actual meat of this diary. The paper from January 31, 1983. It
happened to be 4 pages in section B, the Money section. It contains Reagan's budget,
unemployment figures, stock prices, and the lending rates. You think it is bad now,
when I read the shape of the economy in 1983, it just blew me away. So I thought I
would share some of the most interesting facts from 1983. Here we go in
no particular order.
Reagan's Budget Plans: The Pentagon budget would jump 14%. Social Security payroll
taxes would increase. Reagan calls for spending freeze. Reagan's plan calls for new
fees, higher taxes and program reductions. The clearest evidence of Reagan's spending
freeze will come from those who get checks or other money from the government.
It will be tougher for every federal employee and every federal retiree-the budget would
actually add up to less money in every paycheck for many.
On top of the pay freeze, Reagan also would like to increase federal employee's
pension contributions from 7 percent to 9 percent.
Another part of the solution to the Social Security problem will chop a bit out
of the take-home pay of every working American.
While the Doctors will not be getting more from the government, the elderly and
poor will be paying more for their medical care. The cost of getting sick will rise
at least one dollar for every day a poor person is in the hospital and a dollar
for each visit to the doctor.
And graduate students seeking government guaranteed loans will be paying
more. The government wants to double the "origination fee" on each loan.
Conversely, on the same page is this little blip:
Reagan asks more for White House
President Reagan today asked Congress to approve $110.5 million for the
executive expenses- a 9 percent increase over current levels and a 19 percent boost
since he became president. White House residence spending would rise 10.6% from
4.9 million to 5.4 million.
Here were the unemployment numbers listed January 31, 1983
Per Birmingham News, State of Alabama
Jefferson County 15.8 percent
Bessemer 32.9 percent
Shelby County 15.3 percent
Huntsville 12.9 percent
Mobile 16.1 percent
Tuscaloosa 12.1 percent
Birmingham 19.4 percent
And here is Reagan's response to these staggering numbers, in the same section of these
4 pages of the Birmingham News.
Reagan's budget assumes slow economic recovery.
The Reagan administration sees1983 as a year for consolidating a few gains from the
long recession, but with no quick progress against the accompanying highest
unemployment in four decades.
The Economy is still to weak, interest rates are still too high and federal borrowing will
be eating up much of the money.
Another factor- the activity of the Federal Reserve Board- is harder to measure, but no
one disputes it's importance.
Some economists- and many private business operators hurt by past Fed tight-money policies-could allow stronger economic growth by allowing the nation's money supply to expand more quickly.
And of course, since Republicans can never take blame for anything, remember this is
2 years into Reagan's first term, so this mess is his. but of course they come up with
"Success in reducing the momentum for inflation and interest rates was achieved at a considerable cost. It should be carefully noted that the unexpected severity and length
for the economic downturn in 1981 and 1982 can be directly traced to the
unprecedented buildup of inflationary forces in the 1970s."
Sound like Bush? It is the other guys fault, not mine. yada, yada. O.K. now take a look
at a few stocks in 1983, right there in the same section. Who would of thought a
4 page section of the Birmingham News could contain a complete financial snapshot
of 1983, but here are some interesting stock prices:
General Motors $61.75
Ford Motors $39.75
Merrill Lynch $61.25
Someone lost their ass on some of these stocks. Can you believe what they were
going for. WOW! The stock market at noon of the printing of this paper was 1,066.59.
And now it is at between 7500-8000.
O.K. next in this section is a list of current lending rates. And these are bank rates, for
a mortgage or conventional loan, with Good Credit.
Current consumer loan rates at local banks and savings and loans.
Lowest rate available at 15% for unsecured loan, 12 month.
New Auto 13.5%-17.07%
Used Auto 16.11%-18%
Second Mortgage 14.34%-17.5%
Bank prime lending rate 11%
Conventional fixed rate mortgage 12.6%-14%
Too bad I couldn't find CD rates. If you actually had any money during this time, the
CD rates probably were pretty good. Ironic that there was only one article about
saving money, explaining IRAs, since they were new at the time. NO internet, you
could just call a handy number, to find out more about your IRA.
Mostly, I wonder, why did people love Ronald Reagan so much. Looks like things
were pretty bad in 1983, and his answer was to freeze spending, and cut back
on all social programs. And of course increase the defense spending, and his
living expenses at the White House.
I was poor at the time, so I guess I didn't notice high interest rates, since I couldn't
borrow any money. We were busy building up our business, working for ourselves.
I know it convinced me of one thing, after reading the money section from 1983.
Ronald Reagan sucked.