Academic Defense of Reaganomics

We found another rarity: an academic who defends Reaganomics. In a study published this month by the Jesse Helms Center, Wingate University economist Peter M. Frank notes that:

“The hallmark of Reaganomics is a major reduction in marginal tax rates by more than half, cutting the highest rate from 70% in 1981 to 28% in 1986. Additionally, Reagan cut the corporate tax rate from 48% to 34%. These radical changes in tax rates, especially the personal income rates at all earning levels, are the core of supply-side policy.”

“In addition to the economic growth data, the 1980s are characterized by two very different time periods. At the beginning of the decade, infl ation and unemployment were too high to achieve the growth that occurred later in the decade. After the Federal Reserve restricted monetary growth, interest rates fell from 13.5% in 1980 to 4.1% by 1988. The unemployment rate peaked at 10.8% in 1983 coming out of the recession and a decline in output during the previous year, but the jobless rate fell to 5.5% by 1988.”

“The Congressional Joint Economic Committee wrote in its April 2000 report that in addition to real GDP growth, from 1983 to 1990 real consumption per person grew by 26.8% and industrial production grew by 28.9%. This period of economic expansion lasted 92 months without a recession, from November 1982 to July 1990, which was the longest period of sustained growth during peacetime and the second-longest period of sustained growth in U.S. history. This growth period lasted more than twice as long as the average period of economic expansion since World War II.”

 

Malcolm A. Kline is the Executive Director of Accuracy in Academia.

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