Binge: End of a Profligate era

I.F. Stone

 

 Main Point

            The United States was in the serious debt problem during the Reagan administration, and nothing has stopped the escalation of cutting tax and accumulating deficits, which leaded to the stock market crash and the massive government’s debts.

 

Summary

            The United States was suffering from the historic bankruptcy especially during Reagan Administration, partly because the saving rate decreased despite tax cuts and people started to spend massive money based on credit.  The public debt, such as the local debt and the total government debt, was almost double compared to the private debt. In terms of the trade deficit, the deficit was increasing during 1980’s though the devaluation was supposed to make U.S. products more competitive, which influence on the stock market and the long-term government bonds. Although George Bush insisted that we couldn’t keep a tax cut and a balanced budget before his election of the vice presidency, he advocated the tax increase and defense cut like Reagan after that.

            What the United States needed to do was the austerity, but neither IMF nor Democratic candidates did say anything toward the problem and the stock market already had started to crash due to the proposition of a levies and a curb on takeovers by the Congress. The total government deficit was already enough to exceed the budget of the civil government itself. The Profligate Era was ending for the gridlock by Reaganomics.

            We can think that we are living in the world where economic depression and war worsen regional conflicts from the fact that the economic crisis coincides with the Persian Gulf.

 

 

Summarized by Yukiko Motohashi