Obama vs. Reagan. Which approach do you prefer?

This post is dedicated to the love of my life who is a bigger Reagan fan than me (which I never thought was possible).

I will super-impose the words of both Presidents' first inaugural address.


Reagan on Government:

You and I, as individuals, can, by borrowing, live beyond our means, but for only a limited period of time. Why, then, should we think that collectively, as a nation, we're not bound by that same limitation? We must act today in order to preserve tomorrow. And let there be no misunderstanding: We are going to begin to act, beginning today.

The economic ills we suffer have come upon us over several decades. They will not go away in days, weeks, or months, but they will go away. They will go away because we as Americans have the capacity now, as we've had in the past, to do whatever needs to be done to preserve this last and greatest bastion of freedom.

In this present crisis, government is not the solution to our problem; government is the problem. From time to time we've been tempted to believe that society has become too complex to be managed by self-rule, that government by an elite group is superior to government for, by, and of the people. Well, if no one among us is capable of governing himself, then who among us has the capacity to govern someone else? All of us together, in and out of government, must bear the burden. The solutions we seek must be equitable, with no one group singled out to pay a higher price.

Now, so there will be no misunderstanding, it's not my intention to do away with government. It is rather to make it work--work with us, not over us; to stand by our side, not ride on our back. Government can and must provide opportunity, not smother it; foster productivity, not stifle it.

Obama on Government:

The question we ask today is not whether our government is too big or too small, but whether it works - whether it helps families find jobs at a decent wage, care they can afford, a retirement that is dignified. Where the answer is yes, we intend to move forward. Where the answer is no, programs will end. And those of us who manage the public's dollars will be held to account - to spend wisely, reform bad habits, and do our business in the light of day - because only then can we restore the vital trust between a people and their government.

Nor is the question before us whether the market is a force for good or ill. Its power to generate wealth and expand freedom is unmatched, but this crisis has reminded us that without a watchful eye, the market can spin out of control - and that a nation cannot prosper long when it favors only the prosperous. The success of our economy has always depended not just on the size of our Gross Domestic Product, but on the reach of our prosperity; on our ability to extend opportunity to every willing heart - not out of charity, but because it is the surest route to our common good.
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Odd. Market has seemed to work well until now just fine and people have done well. It's only when, as Reagan said it, when people have borrowed beyond their means that the market has collapsed. People are now feeling the short-term squeeze but not everyone. Those who work in un-levereaged industries and are un-leveraged themselves are doing alright. The market is not being unkind to EVERYONE.

There is a problem of credit in the United States. That is what needs to be addressed. The government needs to reduce debt right away. Americans need to reduce their personal debt load. Only then, will things rebound. Foreclosure relief, bigger government and corporate welfare will only increase the nation's mortgage and go into a blackhole. Sometimes bankruptcies just need to go through the pipe.

It is precisely because government tried to be all things to all people and then fail incredibly (as Reagan prophecized) that the public's trust with government has been lost. It is not government's job to meddle in daily lives. It is government's job to get out of the way of opportunity and innovation as Reagan correctly pointed out.

Reagan's way of cutting taxes and slowing the growth of government would be very effective today. Added borrowing on the government is not the way to get the US out of the rump.