What about a non-mainstream president who decided to try a different approach to policy; one that focused on fiscal responsibility, the infallibility of the Constitution, free-markets, limited regulation and liberty rather than increasing government power, increasing the debt and regulating the private sector to incredible excess? This was the approach of one of the greatest influencers on my views on economic policy: President Ronald Reagan.

Under President Reagan’s counter-policies to FDR’s New Deal and Lyndon Johnson’s Great Society, Reagan instead sought to capitalize on a Great Expansion, which was a wave of economic and domestic policies in the 1980s that would spur on one of the greatest economic periods of growth and productivity in United States history. Under Reagan in 1983, “…the economy recovered and headed into one of the longest periods of growth and expansion in American history. The stock market boomed, pushing the Dow Jones industrial average from 776 in August 1982 to an all-time high of 2,722 in August 1987” (Faragher, p. 817). As I was reading through the textbook and its progressive criticism of “Reaganomics”, I must say I found myself in sharp disagreement with its assessments. According to The New York Times in 1990, “The two key measures that mark a depression or expansion are jobs and production. Let's look at the records that were set. Creation of jobs. From November 1982, when President Ronald Reagan's new economic program was beginning to take effect, to November 1989, 18.7 million new jobs were created. It was a world record. Never before had so many jobs been created during a comparable time period” (Anderson, 1990).

Faragher primarily alluded in his book Out of Many: History of the American People to the “advantages” of the top percentage of income earners over anyone else (Faragher et al, 818-819). It was here during this period in Reagan's economy that the concept of “trickle down economics” was developed. However, as the Foundation for Economic Education concluded, such a concept really doesn’t exist. As a matter of fact, they concluded that “There’s no economic argument that claims that policies that themselves only benefit the wealthy directly will somehow “trickle down” to the poor. Transferring wealth to the rich, or even tax cuts that only apply to them, are not policies that are going to benefit the poor, or certainly not in any notable way”(Horwitz, 2016). Our textbook even conceded that the Economic-Recovery Tax Act of 1984 established across-the-board tax cuts for both corporations and individuals, greatly contributing to the surge in economic growth and stability (Faragher et al, 816).

Equality of outcome typically does not exist, whether in a socialist or a capitalist society. In my opinion, it is only equality of opportunity that is the plausible factor of an economic society that must be vigorously defended, which I believe Reagan achieved superbly throughout his presidency (while dealing with an increasingly powerful Soviet Union in the Nuclear Arms Race). According to The New York Times’ assessment of job creation under Reagan, “The new jobs covered the entire spectrum of work, and more than half of them paid more than $20,000 a year. As total employment grew to 119.5 million, the rate of unemployment fell to slightly over 5 percent, the lowest level in 15 years. Creation of wealth” (Anderson, 1990). Top personal income taxes were also severely lowered during this period as well also greatly contributing to the economic boom that occurred during the 80s (Ibid).

John Faragher continuously pointed to the numerous cuts in federal spending and programs that occurred under Reagan, but if any of the programs I analyzed during FDR and Woodrow Wilson’s administrations in previous postings are any indication, federal programs that dramatically hike taxes to inconceivable rates to then redistribute wealth to unsustainable programs only enhance the problem of poverty and economic entrapment that these programs are “intended to fix”. By cutting the excessive amount of federal spending and dramatically cutting tax rates, citizens were able to keep more of their hard earned dollars while at the same time gain work in a competitive working environment as the numbers above indicate. An analysis by the U.S. Senate Joint Economic Committee Republicans even showed that household median income shot up 13% for families between 1982 and 1989 (Frenze, 1996).

The creation of wealth in the United States during the 80s boom was also extraordinary. The New York Times analyzed that around $30 trillion dollars worth of goods and services were created during the 80s. Specifically, “…it was a world record. Never before had so much wealth been produced during a comparable period. According to a recent study, net asset values, including stocks, bonds and real estate, went up by more than $5 trillion between 1982 and 1989, an increase of roughly 50 percent” (Anderson, 1990).

Faragher seems to try to counter all of this astoundingly convincing pieces of evidence by focusing primarily on the national debt (Faragher et al, 817). However, without further investigation into the numbers, the “face-value” statistic can be a bit misleading. The debt must be viewed in comparison to overall GDP and cannot be isolated on its own. Simple arithmetic solves this problem. The debt in 1980 was approximately around $908 billion, which was 32% of the GDP (which was $2.8 trillion at the time). By 1989, the debt had indeed increased to around approximately $2.86 trillion, but was only 50% of the GDP during that year, which had skyrocketed over 80% to approximately $5.7 trillion dollars (Amadeo, 2017) and that includes the uptick in defense spending that occurred during that period (Note: personal mathematical calculations through data taken from the chart provided in Amadeo article).

There is no down-playing the tremendous successes that occurred under the Reagan Administration, and his principles on preserving economic liberty and protecting the small-business sector through deregulation and less taxation gave the entire U.S. economy breathing room to produce incredible growth and made our country a formidable economic check against powerful combative nations like the Soviet Union. I guess it is no secret of mine that I hold free-market views on economic policy but my studies over the years have continuously led me to the conclusion that austerity economics continuously yield the most profitable results for all citizens within the United States and Reagan’s Administration was proof of this. Liberty is a powerful driver of economic policy, and Reagan’s commitment to the protection of liberty unleashed the potential of the American economy, which is why any attempts to inhibit it as was done under the FDR and Wilson administrations will only work to greatly stifle growth that the United States has already proven is capable of achieving.

In my opinion, there was no better economic president than Reagan. There is something about liberty and its ability to stimulate the economy and job growth, and Reagan's adherence to liberty's principles allowed the American economy to see record-breaking economic benefits.

Joseph Vazquez III

References:

Anderson, Martin. 1990. "The Reagan Boom-The Greatest Ever." The New York Times. January 17. Accessed August 11, 2017. http://www.nytimes.com/1990/01/17/opinion/the-reagan-boom-greatest-ever.html.

Horwitz, Steven. 2016. "There is No Such Thing as Trickle-Down Economics." Foundation for Economic Education. September 24. Accessed August 11, 2017. https://fee.org/articles/there-is-no-such-thing-as-trickle-down-economics/.

Frenze, Christopher. 1996. "Income Growth During the 1980s." Joint Economic Committee Republicans. March. Accessed August 11, 2017. https://www.jec.senate.gov/public/_cache/files/b9a01391-1a7d-4ceb-aab2-9446776c92ad/income-growth-during-the-1980s---march-1996.pdf.

Amadeo, Kimberly. 2017. "National Debt By Year Compared to GDP and Major Events." The Balance. July 31. Accessed August 11, 2017. https://www.thebalance.com/national-debt-by-year-compared-to-gdp-and-major-events-3306287.