“The federal deficit ballooned from 2.7% of GDP in 1980 to 6% of GDP in 1983, the largest peacetime deficit in history, and was still 5% of GDP in 1986,” notes John Miller for Dollars and Sense.
Reagan appointed Alan Greenspan, the Federal Reserve chairman who played an instrumental role in the economic disaster we are all now living through. Prior to elevating Greenspan, Reagan endorsed the reduction in money growth – one end of the infamous whipsaw – initiated by the Federal Reserve in late 1979, a policy that led to both the severe 1982 recession and a large reduction in inflation and interest rates.
The privately owned Federal Reserve’s shrewd manipulation of the money supply and the accumulated debt it has placed on the American people – debt owed to banksters for money loaned out of thin air to a government Reagan represented – has resulted in an unsustainable situation where 100 percent of what is collected at gunpoint in individual income taxes is spent on the interest on the federal debt.
Reagan’s Grace Commission said as much. It suggested reforms to lower the national debt, but all proposals were ignored by Congress.
Reagan established a woeful legacy. When he took office, the national debt stood at 1 trillion dollars. Over the last 30 years, the government has accumulated an additional 12 trillion dollars in debt. “If right this moment you went out and started spending one dollar every single second, it would take you more than 31,000 years to spend one trillion dollars,” writes The Economic Collapse. The U.S. debt is now 90 percent of the GDP, or Gross Domestic Product.