STILL MORNING IN AMERICA
January 20, 2006
Twenty-five years ago today, Ronald Reagan was inaugurated as the 40th President of the United States promising less intrusive government, lower tax rates and victory over communism. If the story of history is one long and arduous march toward freedom, this was a momentous day well worth commemorating, says the Wall Street Journal.
All the more so because over this 25-year period prosperity has been the rule, not the exception, for America -- in stark contrast to the stagflationary 1970s.
- Perhaps the greatest tribute to the success of Reaganomics is that, over the course of the past 276 months, the U.S. economy has been in recession for only 15.
- That is to say, 94 percent of the time the U.S. economy has been creating jobs (43 million in all) and wealth ($30 trillion).
- More wealth has been created in the United States in the last quarter-century than in the previous 200 years.
The policy lessons of this supply-side prosperity need to be constantly relearned, lest we return to the errors that produced the 1970s, says the Journal.
The heart and soul of Reagan's economic agenda were sound money (making the dollar "as good as gold," as Reagan used to put it) and lower tax rates. Today, nearly all economists agree with Reagan's then-controversial belief that the sole purpose of monetary policy should be to keep prices stable. Double-digit inflation is a distant memory unlikely to recur anytime soon.
On tax policy, Reaganomics has also carried the day, if somewhat less completely. Tax rates in the United States are on average half as high now as they were in the 1970s, and almost every nation has followed the Reagan model of lower tax rates.
Source: Editorial, "Still Morning in America," Wall Street Journal, January 20, 2006.
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