Reaganomics Is Dead?
“We’re in better shape than [Republicans] are, because they don’t realize that Reaganomics is dead, that the Reagan philosophy is dead,” he said. “We realize that New Deal democracy, which is still our paradigm, which is sort of appeal to each group ... that doesn’t work any more.”
“The old Reagan theory which dominated—which is, ‘Government is bad, it’s out of touch, chop off its hands as soon as it moves.’—is over.”
“Reaganomics” (or just plain fiscal conservatism) is the idea that the economy is at its strongest when government burden, interference and regulation is kept to an essential minimum. It does not hold that government regulation or control is “bad,” only unnecessary in most instances.
If anything, the economy we are currently living in is a testament to the fact that fiscal conservatism works. Since 2000 our economy has gone through the .com bubble, a massive terror attack and two wars, yet despite all that unemployment is low, personal income is up and the economy continues to grow at a robust pace it has kept up for about three years now. Why has that happened? There are a lot of reasons, but Bush’s tax cuts (one of the most sweeping and drastic reforms to tax policy ever) deserve a lion’s share of the credit, because when people have more of their own money in their pockets to save or spend there are positive repercussions across the board economically.
Which is something that one of the most famous Democrats ever, John F. Kennedy, understood well:
...the most direct and significant kind of federal action aiding economic growth is to make possible an increase in private consumption and investment demand — to cut the fetters which hold back private spending. . . .
The final and best means of strengthening demand among consumers and business is to reduce the burden on private income and the deterrents to private initiative which are imposed by our present tax system — and this administration pledged itself last summer to an across-the-board, top-to-bottom cut in personal and corporate income taxes to be enacted and become effective in 1963.
I’m not talking about a “quickie” or a temporary tax cut, which would be more appropriate if a recession were imminent. Nor am I talking about giving the economy a mere shot in the arm, to ease some temporary complaint. I am talking about the accumulated evidence of the last five years that our present tax system, developed as it was, in good part, during World War II to restrain growth, exerts too heavy a drag on growth in peace time; that it siphons out of the private economy too large a share of personal and business purchasing power; that it reduces the financial incenitives [sic] for personal effort, investment, and risk-taking. In short, to increase demand and lift the economy, the federal government’s most useful role is not to rush into a program of excessive increases in public expenditures, but to expand the incentives and opportunities for private expenditures.
Tax cuts work. Limited government works.
Reagonomics isn’t dead, big-government liberals like Chuck Schumer would just like you to believe it is so that they have an excuse to dig even deeper into your wallets and purses.
