Ronald Wilson Reagan (Part 90)

President Reagan and Nancy Reagan present Pianist Vladimir Horowitz with the Medal of Freedom in the Roosevelt room. 7/28/86.

From Oct. 28, 1980 in Cleveland, here is part 10 of 11 of the Carter-Reagan Presidential Debate, as taped from WJKW-TV, CBS. This segment has the end of the debate, plus some analysis from the CBS News Staff. Part 11 will have news from WJKW, TV8 in Cleveland, about the debate.

Lee Edwards of the Heritage Foundation wrote an excellent article on Ronald Reagan and the events that transpired during the Reagan administration,  and I wanted to share it with you. Here is the third portion:

The first and most decisive step was tax reform. The top marginal rate on individual income was 70 percent, and Reagan, who had majored in economics in college and had read extensively in the field during the 1950s and 1960s, concluded that if you reduced tax rates and allowed people to spend or save more of what they earned, “they’ll be more industrious, they’ll have more incentive to work hard, and money they earn will add fuel to the great economic machine that energizes our national progress.” Some economists called this approach supply-side economics; “I call it common sense,” Reagan wrote in his 1990 autobiography.[iv]

As early as 1964 in his famous television speech for Barry Goldwater, Reagan had sharply criticized the high taxes and large subsidies demanded by America’s welfare state and warned, “No nation in history has ever survived a tax burden that reached one-third of its national income.” As governor of California, he had striven to reduce taxes, even sponsoring a tax limitation amendment to the state constitution which had been narrowly defeated. Reagan was a supply-sider, wrote Ed Meese, his long-time colleague, “long before the term was invented.”[v]

The conviction “that the size of the economic pie must be increased, not simply sliced differently” was fundamental to supply-siders. For Jack Kemp and others, this was a far more appealing message than the “balance the budget” imperative usually associated with Republicans. The “bibles” of this new economic gospel were Jude Wanniski’s The Way the World Works, published in 1978, and George Gilder’s Wealth and Poverty, published in 1981. It had first been proposed legislatively in 1977 by Kemp and Senator William Roth of Delaware with their 30 percent tax cut. But supply-side economics was far more than tax cuts — it envisioned a world “stripped of the tax preferences, subsidies and economic regulations” that were “strangling” the economy.[vi]

It would take fireside chats with the American people, deals with boll-weevil Democrats in the House of Representatives, pep talks with discouraged aides, and even near death from an attempted assassination, but on August 17, 1981, President Reagan signed the Economic Recovery Act (ERTA) into law. It was the tax reform Reagan had been urging for decades. Newsweek called it a “second New Deal potentially as profound in its import as the first was a half century ago.”[vii]

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