Bruce Bartlett
The Washington Post
Despite what you hear from the campaign trail, Reaganomics won’t fix our economy today, said Bruce Bartlett. I drafted the 1981 Reagan tax cut, and I can tell you that the Republican candidates vying to claim Reagan’s mantle “misunderstand the premises” of his policies. Back then, we wanted to increase growth and employment, just like today, but the “top problem” we aimed to tackle was inflation, which had risen from 4.9 percent in 1976 to a debilitating 13.3 percent in 1979. We hoped that by lowering taxes, we would give people more incentive to work and invest, and inflation would decrease. We were right. After the tax cut, “inflation dropped like a rock,” to 3.8 percent in 1982, even though unemployment was slightly higher during Reagan’s tenure than it had been the previous eight years. Today, the economic situation is completely different. Inflation is low. The top tax rate is half of what Reagan inherited. And federal revenue is lower than it has been in 60 years. Different problems need different responses. Republicans would be wise to stop engaging in “cookie-cutter economics.”
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