Wednesday, December 16, 2009

Evaluation of the Reagan Economic Proposals

A presentation made by Jay Forrester and Nathaniel Mass in 1981.

conclusions are that

1. The best way to combat inflation in the long run is to reduce government spending. That is, "reducing the share of GNP demanded by government so that a larger share can be retained in the private sector as incentive for greater output and an improved standard of living.
2. Cutting taxes while there is a deficit "will strongly increase the risk of money creation and inflation." "The effect on wages and prices will be just enough to cancel the apparent direct supply-side incentives offered by the tax reduction."

Pretty interesting combination of liberal and conservative economic policies. I wonder what it means for climate change policy, though. Does this mean it's bad if the government funds programs for technology research and development? If so, then what can the government do instead?

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