What Ronald Reagan Doesn’t Know About His Own Achievements

The U.S. economy is currently in the midst of a worldleading surge of productivity growth, innovation, capital formation, and employment. The United States is applying high technology nearly 50 per cent faster than Europe or Japan. Spending on capital equipment—led by electronic gear—set an all-time record for the first year of a recovery, rising at three times the average pace of first-year upturns since World War II. As a result of President Reagan’s tax policies, the rich have been paying decisively the highest share of income taxes they have paid in 11 years. Outside of the desperate sloughs of the welfare culture, which the politicians in their famous compassion refuse to change, the poor are rapidly leaving poverty and are paying their smallest share of income taxes in more than a decade. In 1983 the U.S. created four million new jobs—a peacetime record—and is now employing a record 61 per cent of the working-age population, a level some 15 per cent higher than its European rivals’.

Why on earth doesn’t President Reagan know all this? Why does he stumble and grope at a press conference when asked a question about the fairness of his tax program or the performance of the economy? Why do leading Republicans believe they have to raise tax rates to get more revenue when lowering rates in the high brackets has achieved this result while expanding employment and growth? Why do leading economists speak of sluggish productivity growth and suggest that the U.S. continues to lag behind Europe in this key index?

About the Author

George Gilder

Mr. Gilder is a founder of the Discovery Institute, a venture capitalist, and the author of 15 books, including The Israel Test.

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The U.S. economy is currently in the midst of a worldleading surge of productivity growth, innovation, capital formation, and employment. The United States is applying high technology nearly 50 per cent faster than Europe or Japan. Spending on capital equipment—led by electronic gear—set an all-time record for the first year of a recovery, rising at three times the average pace of first-year upturns since World War II. As a result of President Reagan’s tax policies, the rich have been paying decisively the highest share of income taxes they have paid in 11 years. Outside of the desperate sloughs of the welfare culture, which the politicians in their famous compassion refuse to change, the poor are rapidly leaving poverty and are paying their smallest share of income taxes in more than a decade. In 1983 the U.S. created four million new jobs—a peacetime record—and is now employing a record 61 per cent of the working-age population, a level some 15 per cent higher than its European rivals’.

Why on earth doesn’t President Reagan know all this? Why does he stumble and grope at a press conference when asked a question about the fairness of his tax program or the performance of the economy? Why do leading Republicans believe they have to raise tax rates to get more revenue when lowering rates in the high brackets has achieved this result while expanding employment and growth? Why do leading economists speak of sluggish productivity growth and suggest that the U.S. continues to lag behind Europe in this key index?