David Frum shows us the Reagan years were not good for the average American Family

David Frum, likely getting ready to accept next year’s Nobel prize in economics, explains why the liberal government in Canada has not been good to the average Canadian family:

Between 1993 and 2003, Canada?s total gross domestic product ? the value of all Canadian-made goods and Canadian-provided services ? rose by two-thirds. […] Where did that extra production go? That?s the question answered by the second number, 45%. The lion?s share of Canadian economic growth in the 1990s was pocketed by government, especially the federal government. Between 1993 and 2003, federal revenues rose by 45%, or almost $60 billion.

Poor average Canadian family concludes Frum — the Liberals have not been good for them at all. [sniff] Which is why we wondered how, using the test offered by David, the average American family fared under Reagan (data from 1981 to 1989:)

US GDP, 1981: US$3.06 trillion
US GDP, 1989: US$5.42 trillion

Increase of: 77%.

US Tax Revenue, 1981: US$599.1bn
US Tax Revenue, 1989: US$991.2bn

Increase of: 65%.

(Source: Excel file 1 and 2.)

Frum adds that disposable income went up by 31% during those ten years, which is apparently not good, though it’s not that much lower than Reagan’s 8 years (31.9%.) [3.1% v. 3.9%] Given how super duper we’re told the Reagan years were, one wonders: why the sad face David?

Frum also bemoans the decline in the value of the Canadian dollar, though it’s not clear what, exactly, he thinks the government should have done. (Nor does he note the fact that the US dollar has appreciated against the currencies of other countries at the same time.) Or note that as the most trade dependent of all G7 nations, Canada does reap some benefits from a weaker dollar.

So in conclusion: David Frum is a giant ass and he hates Ronald Reagan. Thank you.

Added: In the comments, reader dmm makes the obvious (non Reagan related point.) Time for a quiz:

Your income is $100, and your tax rate is 40%, which means (we think) that you pay $40 in taxes. Your income goes up by 40% to $140. Your tax rate remains the same, and you now pay 40% of $140, i.e. $56. So your taxes also went up by 40%. Does this mean that the government took all of your pay raise away? Sadly, No!


Comments: 12


Dickweed and stain upon the earth are two others I use in conjuction with ‘ass’ when speaking of that dickweed ass David Frum, what a stain upon the earth.


What a maroon. GDP went up by 67%, so all things being equal, federal revenues should go up by the same amount. If they only went up by 45%, that means that 22% went somewhere else.

I don’t have the raw numbers at hand, so maybe Frum is correct and the real point is obscured by the fact that he’s such a bad writer, but it looks to me like this is some of that National Review-style economic innumeracy that makes Brad Delong cry himself to sleep every night.


The Lion’s Share, National Review Style (Why Us? Department)

Crossing my desk this morning. We really do need a much better press corps. All I can say is that we must all have been very, very, very bad in a previous life to have to suffer this in our current one… It is, however, at one level, quite funny: Sadl…


I should also point out that the federal deficit in 1993 was approximately CAD40 billion, and the surplus in 2003 was approximately CAD5 billion. That means that 75% of the increased federal revenues over the period went towards not spending money that the government didn’t have.


Dim Future?

Sadly, No! hammers David Frum and then Brad Delong piles on and regarding Frum’s discussion of Canadian economic growth asks:Why does Frum think–as he appears to–that increases in the government have consumed 2/3 of economic growth–45 as a share of …


Your income is $100, and your tax rate is 40%, which means (we think) that you pay $40 in taxes. Your income goes up by 40% to $140. Your tax rate remains the same, and you now pay 40% of $140, i.e. $56. So your taxes also went up by 40%. Does this mean that the government took all of your pay raise away? Sadly, No!

My father, a fucking engineer for fuck’s sake, asserts the following all the time:

“I pay 8.5% sales tax, 39% income tax, property tax of about 2%/year, about 3% gasoline tax. That means I pay over half of my income in taxes!!!!”

Sadly, no! That could only be true if you spent all your income AND didn’t take any deductions to your income when figuring the income tax AND spent all your money on gasoline.

I’ve tried explaining this to him but he is not only a conservative Gooper, he’s stubborn as the day is long. In summer. In Antarctica.

Yet he, a Cheney-ing engineer, thinks he can add up all the percentages and figure that’s how much he pays in taxes.


It might be a genetic thing – most Canadians hate Ronnie Ray-Gun. But Frum certainly doesn’t qualify as one of the more polite Canadians… he sort of reminds me of that South Park Canadian character, Dick.


You can add my name to the list of Canadians who think David Frum should make the Assholes’ Hall of Fame.


I think Frum’s worst nightmare has just come true. A Liberal minority that needs to form a coalition with the NDP (the far left party) to stay in power. Bwahahaha! I hope the right whingers in Canada are all crying themselves to sleep tonight.


If we want to compare the two economies we have to add the cost of health care to both the income and tax side for Americans. Given that Canadians get health care for their taxes it has to be calculated for both sides.

To do a decent comparison you have to equalize both sides or you end up with more footnotes than report. The concept is called “comparing apples to apples”.


Look, it’s very simple: The government in Canada took 18% of GDP in 1990, and then took 16% in 2003, so if you add them together you get 34%. A 34% tax represents an 88.8% increase from the previous level of 18%, but just to be generous we’ll call it an 88% increase. When you add that 88% increase to a gas tax of over 40%, it’s clear that the government in Canada is now not only confiscating every penny of income, it is pre-emptively confiscating the income of its unborn children. And that’s why we need a right-to-untaxed-life amendment.


Isn’t the average American family better off without the Soviet Union?

Also, how did average Americans fare under Reagan’s predecessor, Jimmy Carter? Carter’s skyrocketing gasoline prices, double-digit interest rates, stagflation, and national malaise, were a handful for Reagan to address.


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