In his Monday column criticizing the President’s handling of the economy, revisionist historian Vijay Ramanavarapu again writes without researching his arguments, and presents an entire column of nothing but pure political rhetoric. I was bewildered by his claim that Ronald Reagan had ruined the health of the economy during his two terms as President. I feel compelled to set the record straight:
Before Reagan’s historic tax cut first took effect in 1982, our economy was still spiraling downward from Carter’s administration; unemployment was at 9.5 percent, runaway inflation hit 13.5 percent, interest rates were at 18.9percent, and the median family income was falling. But Reagan’s economic policy quickly turned the tide, and got America back on track. From 1982-89, the country experienced the longest peacetime period of economic growth in its history while the GDP grew by 30 percent. Inflation was rapidly halted, and fell to 4.1 percent by 1988. His tax cuts helped produce 20 million new jobs, and unemployment steadily dropped to 5.2 percent at the end of his second term. Interest rates returned to normal, and were down to 8.2 percent by 1987. Tax rates were reduced for every income bracket, and yet, total tax revenue increased $42 billion from 1981 (before the tax cut) to 1989, just as supply-side economics predicted. By the numbers, “Reaganomics” was a resounding success.
Even more important were the real effects his policies had on working Americans. During his eight years, the median household income went up $4,000. Housing affordability (measured by HAI) doubled. Members of every quintile (20 percent bracket) experienced a rise in real income, and a full 46 percent of Americans were in a higher quintile in 1988 than they were in 1979. The poorest 20 percent of workers saw the greatest gains, with 86 percent jumping to the next quintile. The rich, the middle-class, and the poor all got richer.
The lone negative economic result of the ’80s, the large deficit, was caused not by Reagan’s policies, but by Congressional spending. Had they not added 24.5 percent (cumulative) of additional spending to Reagan’s budget proposals, we would’ve seen not a deficit, but a surplus in 1989 of $130 billion.
The facts speak for themselves. If Bush runs the economy the way Reagan did, we’ll all be in for six years of growth and prosperity.
Chad BerningJunior in agriculture education
