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