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By A. Hadenius
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Extra info for American Exceptionalism Revisited: US Political Development in Comparative Perspective
In Reagan’s understanding, however, government intervention in itself was a problem: The enlarged public undertakings had become a burden on society. A new policy—restraint in public spending combined with tax reform—would release the dynamic forces in society (Hayward 2009). For the first time in many decades, a comprehensive tax reform was carried out under Reagan. The general tendency was to lower the rate of income tax and to raise other levies instead (particularly business taxes). On the spending side, however, no major cutbacks were implemented.
To that end the insurance plans—which have been made mandatory—provide subsidies to people of small means. It is interesting to note that comprehensive health insurance has been on the political agenda for a very long time. The first serious proposal was made in the presidential election of 1912 by Theodore Roosevelt. But nothing happened. As we will see in the next chapter, President Clinton made a serious attempt in the early 1990s to carry out such a reform. Despite Democratic control of both chambers of Congress, the effort failed.
As a result, politicians are forced to pay the price (sometimes a very high one) for political commitments made by their predecessors. And, indeed, such an approach may be quite helpful for explaining federal expansion over the last decade and a half. The basic cause of the federal expansion was the deep economic downturn that began in 2008, and which resulted in much higher unemployment and a protracted deterioration of median household income. ), the cost of which soared dramatically. At the same time revenues fell sharply, due to the same economic downturn.
American Exceptionalism Revisited: US Political Development in Comparative Perspective by A. Hadenius