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What Reagan Could Teach Biden About the Economy

Posted on Wednesday, June 15, 2022
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by AMAC, Bob Carlstrom
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Reagan

It was a new year. A new president was being sworn in against a backdrop of a fledgling economy on the brink of recession. Americans were suffering from high taxes, high unemployment, high interest rates, and a low national morale. No, I’m not talking about 2021 when President Biden was sworn in, although the comparisons are strikingly similar. I’m talking about 1981 when Ronald Reagan was sworn in. 

Reagan came into office with a mission and a plan to execute it. Bringing America back was President Reagan’s top priority. During his inaugural address, Reagan faced the crisis head on, stating, “This Administration’s objective will be a healthy, vigorous, growing economy that provides equal opportunities for all Americans, with no barriers born of bigotry or discrimination. Putting America back to work means putting all Americans back to work. Ending inflation means freeing all Americans from the terror of runaway living costs. All must share in the productive work of this ’new beginning,’ and all must share in the bounty of a revived economy.”

His economic plan consisted of four pillars: 1) cut federal income tax and the capital gains tax to encourage investment; 2) reduce the growth of government spending to “starve the beast”; 3) cut government regulations to make starting and operating a business easier; and 4) tighten up the money supply in order to reduce inflation. Reagan faced charges of promoting “voodoo economics” or “trickle down economics” but helped push these changes through even despite the criticism he received from Democrats and even those in his own party. Nevertheless, Reagan plowed ahead, trusting his instincts that putting more money in people’s pockets, reducing spending, and getting the government out of the way will enable the free market and boost the economy.

He worked with Congress to produce and push forward the Economic Recovery Tax Act of 1981, which laid the foundation for the “Reagan Recovery.” A few years later, the Tax Reform Act of 1986 brought the lowest individual and corporate income tax rates of any major industrialized country in the world.

President Reagan’s numbers tell the story. According to the Ronald Reagan Presidential Foundation, over eight years of the Reagan Administration: 

  • “20 million new jobs were created”
  • “Inflation dropped from 13.5% in 1980 to 4.1% by 1988”
  • “Unemployment fell from 7.6% to 5.5%”
  • “Net worth of families earning between $20,000 and $50,000 annually grew by 27%”
  • “Real gross national product rose 26%”
  • “The prime interest rate was slashed by more than half, from an unprecedented 21.5% in January 1981 to 10% in August 1988”
  • “Given actual rates of inflation, through 1987, the Reagan tax cuts saved the median-income two-earner American family of four close to $9,000 in taxes from what it would have owed in 1980.”

As they say, the proof is in the pudding. Rather than embrace a proven economic model to reduce inflation, which now sits over 10% versus last year, and cut taxes, President Biden and the DC liberals are still promoting a slimmed down version of, his disastrous “Build Back Better” plan. Biden’s BBB plan would raise taxes, pump taxpayer dollars into growing government bureaucracy (in addition to the trillions already spent), and accelerate inflation. Democrats want these policies enacted even while small businesses are still struggling to recover from the pandemic.

President Biden should abandon this disastrous plan and work with Republicans, as he pledged to do on the campaign trail, to halt this runaway train of spending and debt. Heading into recession territory is no time to raise taxes and overspending is a recipe for disaster as inflation is raging. There’s a few things Reagan could teach Biden on the economy and much of it comes down to this: do the exact opposite of what you are currently doing.

Bob Carlstrom is President of AMAC Action and served in President Reagan’s Office of Management and Budget 

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Max
Max
2 years ago

President Reagan had a plan, implemented that plan, and executed that plan, that got this nation out of the idiotic Jimmy Carter fiasco. Pres. Biden came in with a plan to destroy the integrity and economy of the nation for those who are his handlers and is continuing the process with no end in sight. Biden will not become a “Ronald Reagan” to avert the disaster that has been started. This rollercoaster is still heading downward at a great speed that will end in disaster.

Kim
Kim
1 year ago

In the first paragraph, Mr. Carlstrom writes, “A new president was being sworn in against a backdrop of a fledgling economy on the brink of recession. Americans were suffering from high taxes, high unemployment, high interest rates, and a low national morale.” While the author is referring to President Reagan’s taking the White House, I wouldn’t draw the same parallel when biden inherited the presidential baton. Instead biden caused these conditions during his short year and a half in office, after being handed a healthy recovering economy from President Trump.

It will take another conservative to oust these liberals and their nonsensical economics before we can get back on track–back to Reaganomics and Trumponomics (The Trump Bump?). One thing we know for sure is that the current administration has no interest in doing the right thing. So we will continue to suffer until this nightmare is over. (I’m planting lots of vegetables out back.)

Bill T
Bill T
1 year ago

This article is ridiculous, BIDEN has single-handedly (well not quite if you know what I’m saying) took control of a severely wounded country that was in the middle of a medical crisis. Instead of doing everything in his power to help heal and strengthen our country he went ahead and with a poison pen literally destroyed our economy in a few minutes, once our oil and other energy resources were shut down and we all immediately started to pay outrageous prices for gas and diesel fuel it’s started a domino effect with everything, that’s not to mention his pork ridden stimulus packages that we are stuck with right now. The earthquake is right around the corner, get ready, this will be a disaster guaranteed. How dare you even mention a great American president like Ronald Reagan in the same breath as this treasonous trader of our country and all our American citizens.

tika
tika
1 year ago

bye-den’s incapable of learning. just start there.

Morbious
Morbious
1 year ago

Reagan teaching Biden is as ludicrous as Paul of Tarsus instructing Tiberious in moral living. Reagan and Biden are from entirely different moral universes. My opinion of Biden was formed during the Clarence Thomas confirmation hearings. Biden was a demon from hell screaming accusations. He still is, but with diminished capacities. Soon he will enter his real home, but not before inflicting as much damage as possible.

Ollyoop
Ollyoop
1 year ago

Hell, my 16 year old cat has more financial sense in his little claw then Bidung has in his entire body! Unfortunately, about half of the voting citizens in our once great country don’t have a clue either! I really don’t see a change coming from this despotic regime until they look out their gilded windows and see their constituents foraging in the streets for food – of course by then it will be too late to right the ship! But then, that may be exactly their desire!

johnh
johnh
1 year ago

America could be great again if another Reagan type would step up to the plate & run for President of US. He knew how to unite this country by treating everyone equal.

johnh
johnh
1 year ago

WH secretary daily claims Biden is doing everything he can to decrease inflation. He flat out refuses to back off his War on Fossil Fuels & will not even admit it. And then , yesterday his top Executive Order of the day is that all states must allow transgender people to play women sports. What does Joe have against women & how did this become the most important in America yesterday. Where are the rest of Democrats that are letting this happen??

Artzy
Artzy
1 year ago

the Reagan years were very good years.

Bob L.
Bob L.
1 year ago

What appears to be a lack of basic kindergarten economics knowledge by the Biden administration is actually a planned and orchestrated take down of not just the economy, but the nation.

Rik
Rik
1 year ago

NO, Biden is too stupid to do anything that will help and don’t forget that his puppeteers wouldn’t let him anyways! After all, Jackass Joe is taking all the blame and doesn’t seem to even know it!

Myrna Wade
Myrna Wade
1 year ago

The Biden ‘s are pushing losses for ordinary people and some of them must be aware enough to know it. If they take an ethics class, they wear ear plugs.

Mike
Mike
1 year ago

DeSantis – Scott in 2024. We’d get Trump like policies without all the drama. Dump Trump, now! He brings to much baggage, to much drama.

DeSantis – Scott will bring back sound economical policies but, more importantly they will begin to reunite our country. We need this more than anything else.

Rich
Rich
1 year ago

President Reagan could teach Biden: “If more government is the answer, it must have been a really stupid question”. Providing of course Biden could understand.

Sam
Sam
1 year ago

Reagan could NOT teach Biden anything! Joe is too stupid to learn. Let’s GO Brandon.

Patty
Patty
1 year ago

Even President Reagan could “not” teach Biden anything…. Biden has spent “FIVE DECADES in DC”, and during that time, he’s become so adept at lying, he even believes his own LIES.

Wayne
Wayne
1 year ago

Reagan is gone, so he can’t teach Biden anything. Biden’s brain is gone, so he can’t learn anything.

Michael
Michael
1 year ago

Reagan couldn’t teach Biden anything! Biden’s head is so far up his fanny that he’s probably deaf…

Smike
Smike
1 year ago

We need to look, listen and learn. Why did Trump lose? Because too many people will vote for anyone but Trump. That is not going to change. After Jan 6, I will never vote for Trump again. I will not vote for Biden, never had and never will. There are Regans out there, find them…and I will vote for them.

Smike
Smike
1 year ago

And by the way, what does this have to do with the virus??? Another misplaced duplicated article that’s already in another section.

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