Reaganomics at 25

Wall Street Journal ^ | August 12, 2006 | Wall Street Journal

[Tolerance Sucks Rocks]

Twenty-five years ago this weekend, Ronald Reagan signed the Economic Recovery Tax Act. The bill cut personal income tax rates by 25% across the board, indexed tax brackets for inflation and reduced the corporate income tax rate. The anniversary is worth commemorating as a seminal moment that continues to influence policy for the better in the U.S., and around the globe.

The achievement of Reaganomics can only be fully understood by recalling the miserable state of affairs a quarter-century ago. Newsweek summarized the national mood when it wrote in 1981 that Reagan "inherits the most dangerous economic crisis since Franklin Roosevelt took office 48 years ago."

That was no exaggeration. The economy was enduring a cycle of rising inflation with growing levels of unemployment. Remember 20% mortgage interest rates? Terms like "stagflation" and "misery index" entered the popular vocabulary, and declinists of various kinds were in the saddle. The perception of American economic weakness encouraged the Soviet empire to ever bolder adventures, as reflected by Soviet tanks in Kabul and Communists on the march in Nicaragua and Africa.

The reigning Keynesian policy consensus had no answer for this predicament, and so a new group of economic ideas came to the fore. Actually, they were old, classical economic ideas that were rediscovered via the likes of Milton Friedman and the Chicago School, Arthur Laffer, Robert Mundell, and such policy activists in Washington as Norman Ture and Jack Kemp, among others. These humble columns under our late editor, Robert Bartley, led the parade.

[Tolerance Sucks Rocks]

PING!

[the invisib1e hand]

absoulte ever-loving rock and roll holy prosperity, batman BUMP for later!

[wagglebee]

Newsweek summarized the national mood when it wrote in 1981 that Reagan "inherits the most dangerous economic crisis since Franklin Roosevelt took office 48 years ago."

This shows you how biased the media has become in the past quarter century -- they would NEVER say this today.

[stand watie]

TRUE!

in fact, if "JC, the peanut man" was leaving office, the mainSLIME media would say the economy was TOTALLY the GOP's fault!

free dixie,sw

[Falcon4.0]

This is a lesson the boyz over at the Federal Reserve ought to learn. It's high taxes that cause inflation and not a hot economy.

[Moonman62]

Reaganomics died at the age of 20.

[operation clinton cleanup]

Short term unemployment pain gave way to long term gain.

Unemploment %

Year Ann Avg
1948 3.8
1949 5.9
1950 5.3
1951 3.3
1952 3.0
1953 2.9
1954 5.5
1955 4.4
1956 4.1
1957 4.3
1958 6.8
1959 5.5
1960 5.5
1961 6.7
1962 5.5
1963 5.7
1964 5.2
1965 4.5
1966 3.8
1967 3.8
1968 3.6
1969 3.5
1970 4.9
1971 5.9
1972 5.6
1973 4.9
1974 5.6
1975 8.5
1976 7.7
1977 7.1
1978 6.1
1979 5.8
1980 7.1
1981 7.6
1982 9.7
1983 9.6
1984 7.5
1985 7.2
1986 7.0
1987 6.2
1988 5.5
1989 5.3
1990 5.6
1991 6.8
1992 7.5
1993 6.9
1994 6.1
1995 5.6
1996 5.4
1997 4.9
1998 4.5
1999 4.2
2000 4.0
2001 4.7
2002 5.8
2003 6.0
2004 5.5
2005 5.1

[Reagan Man]

Since I don't subscribe to the WSJ, can't finish the article.

Check this out:

"THE REAL REAGAN RECORD" National Review Online, August 31,1992

Go here for the CATO analysis Supply Tax Cuts and the Truth About the Reagan Economic Record,by Stephen Moore

God bless Ronald Reagan.

[Democratshavenobrains]

Lefties always bring up that Carter paid down the deficit when he was President, as if that matters to someone paying gigantic interest rates on mortgages.

[farlander]

Oh they'd say that today if a Democrat took over.

[AdvisorB]

Or not being able to pay a mortgage because of the double-digit unemployment that had gripped the country.

[wagglebee]

Oh yeah. If there was 0% unemployment, every person lived in a paid-off house, had a years salary in savings and zero debt, the media would still say it was the worst economy ever.

[MNJohnnie]

Reaganomics died at the age of 20.

Reaganomic was repeated at the age of 20. What do you think drove all the various Bush Taxcuts? But of course the knee jerk hysteric Bush haters on the Freeper Fringes cannot be bothered with a little thing factual reality.

[MNJohnnie]

And could not find a job or a tank of gas.

[Cobra64]

What's up with this subscriber crap at the WSJ? I wanted to read the entire article and send it to some "I love Jimmy Carter" liberal friends of mine.

[MNJohnnie]

2005 5.1.

The correct number for 2005 is 4.6.

[MNJohnnie]

Oh by the way. Considerably women were in the work force in 1969. Are your numbers adjusted for the exanded workforce?

Oh of course not. That would wreck the spin line.

[Moonman62]

Reaganomic was repeated at the age of 20. What do you think drove all the various Bush Taxcuts? But of course the knee jerk hysteric Bush haters on the Freeper Fringes cannot be bothered with a little thing factual reality.

Tax cuts that were intended to push demand. Reganomics is supply side, not the stuff that W is doing. Remember that the next time you buy gas. RIP Reaganomics.

[operation clinton cleanup]

Take it easy! I found those stats here:

http://www.bls.gov/cps/prev_yrs.htm