Jason Wayne: How did Carter fail?
Frisco, CO Colorado
I have read a few letters over the last few days comparing Obama to Carter, and portraying Carter as a failed president that ruined the economy. I find the Republicans completely wrong in all their statements. A little more history is needed.
In 1965 the Vietnam war was going at full escalation and Johnson began increasing deficit spending to pay for the war. This lowered unemployment, but raised inflation. Sounds kind of familiar, can’t really put my hand on it. Oh yeah, Iraq. Here’s where the problem begins. Inflation fuels itself. As business owners fear inflation, they raise prices, actually creating the expected inflation. Then with rising prices and inflation it created a hyper-inflation that snowballed through the ’70s. This all went on during the Nixon, long before Carter. It just happened to reach its highest peak during Carter.
Carter appointed Volker to head the Fed. Now Volker had some very radical ideas and such as tightening the money supply and putting us in an intended recession. Unemployment went up to 10 percent, but inflation was pretty wiped out. When inflation was looked at as all but gone in late 1982, Volker expanded the money; to the sum of about one trillion. It only took a few months for the economy to pick right up and take of like it did for the “Seven Fat Years.” It worked so well Reagan reappointed Volker with great popularity. It’s a little ironic it was Carter’s pick, huh? It’s also funny to point at that Republicans claim Reagan’s tax cuts helped the economy. Well, Reagan’s tax cuts passed in 1981, were in full effect in 1982. The recession was at its worst in 82. It wasn’t until a few months after late in 82 Volker increased money supply and the economy woke up. Hmmmm.
So please Republicans, explain to me again how Carter failed and Reagan fixed it? It was easy for Reagan to use the general public’s lack of knowledge on economics to his advantage and blame Carter. It is the Republicans’ way right now to use our general lack of knowledge on economics to continue to blame Carter, and to scare us Obama is going to fail. We must remain vigilant and let Obama’s ideas work.
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