July 1, 2019

A cONSERVATIVE, NOT AN IDEOLOGUE:

Everything Wrong with the Reagan Administration (Marcus Witcher, April 2019, Libertarianism.org)

When Reagan took office, the US economy was struggling under what was known as "stagflation" - high unemployment coupled with high levels of inflation. President Jimmy Carter had appointed Paul Volcker as Chairman of the Federal Reserve and Volcker was determined to get inflation under control by raising interest rates. Reagan, having read Milton Friedman and others, agreed with Volcker's approach and gave the Fed Chairman room to implement his monetary policy.[15] As expected, raising the interest rates sent the economy into recession and left Reagan with a low approval rating. [...]

Of course, Reagan also faced the challenge of getting spending cuts through a Democratic House - something that would prove extremely difficult. As such, Reagan decided to seek additional revenues in 1982 by raising taxes. He and Speaker of the House Tip O'Neil held a press conference in the Rose Garden explaining the legislation. The image alarmed some of his most ardent supporters who viewed Reagan's support for tax increases a betrayal of the Reagan Revolution.[19] Reagan explained to those who were concerned that "more than three-fourths of the revenue raised comes from increased taxpayer compliance and the closing of tax loopholes." Reagan would also maintain that O'Neil had promised him three dollars' worth of spending reductions for every dollar in tax increases. A promise - if it was indeed made - that would not be kept.

Despite the tax increases, by early 1983 the American economy was beginning to rebound. Volcker's hard medicine had tamed inflation and the Reagan tax cuts were now fully in effect. President Carter deserves some credit for appointing Volcker and for deregulating the transportation industry. Reagan built on Carter's deregulations ending price controls on gasoline. Furthermore, Reagan further decreased tax rates and simplified the tax code when he signed the Tax Reform Act of 1986.[20] The combination of sound monetary policy, tax cuts, deregulation, and increased military spending resulted in impressive rates of economic growth from 1983 through the end of the Reagan administration. Unemployment also began to decline as the American economy produced around 19 million new jobs from 1983 to 1988.[21]

Although the Reagan economic record is impressive, critics have claimed that Reagan did little to end the flow of manufacturing jobs overseas and that his policies exacerbated income inequality. The main criticism of Reagan, however, is that his administration increased the national debt by 186 percent. Reagan's insistence on dramatically increasing the defense budget (by around 35 percent) and his inability to decrease domestic spending led to an explosion of the national debt. During his administration the debt increased by $1.86 trillion.[22]

Another aspect of Reagan's economic legacy was his ability to compromise with O'Neil to save Social Security. Although Reagan had denounced the federal government's role in Americans' retirements, he signed the Social Security Reform Act of 1983 that "increased the Social Security payroll tax, raised the retirement age for recipients to sixty-seven, required federal employees to join the system, and placed taxes on the benefits of higher-income recipients"[23] Upon signing the bill, Reagan exclaimed that this "demonstrates for all time our nation's ironclad commitment to Social Security."[24] On the one hand, Reagan could be praised for his willingness to compromise his principles and work across the aisle to save a program that most Americans supported. [...]

Perhaps Reagan's greatest contribution to our political discourse today was his unflinching belief in immigration as a source of American greatness. Reagan signed comprehensive immigration reform in 1986 that granted almost 3 million people amnesty.[33] In his farewell address, Reagan described the United States as a shining city on a hill: "It was a tall, proud city built on rocks stronger than oceans, windswept, God-blessed, and teeming with people of all kinds living in harmony and peace; a city with free ports that hummed with commerce and creativity." Reagan continued that "if there had to be city walls, the walls had doors and the doors were open to anyone with the will and the heart to get here."[34]

Likewise, in his "Brotherhood of Man," speech, Reagan spoke about his desire to see a world where the people of the globe lived in harmony. Reagan insisted that the US was "the one spot on earth where we have the brotherhood of man." The former president declared that "if we continue with this proudly, this brotherhood of man [will be] made up from people representative of every corner of the earth, maybe one day boundaries all over the earth will disappear as people cross boundaries and find out that, yes, there is a brotherhood of man in every corner."[35] In the midst of the Trump presidency it is important to remember that an alternative Republican vision on immigration, trade, and general human flourishing exists. While Reagan's policies were a mixed bag, he continues to provide timeless rhetoric that elevates the individual above the collective and preaches tolerance rather than exclusion.

Posted by at July 1, 2019 12:00 AM

  

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