Reagan's Greatness
by Sen. Jon Kyl

02/18/2010

February 6 marked the 99th birthday of one of our most successful and beloved former presidents, Ronald Reagan.

At this time of economic uncertainty and global tension, it’s worth recalling the challenges Reagan faced when he took office and what he did to conquer them.

Reagan’s legacy rests on two central achievements: First, he rejuvenated a stagnant economy, setting the stage for a lengthy period of economic expansion. Second, he helped win the Cold War -- peacefully.


When Reagan came into office, the country was suffering from stagflation, the simultaneous occurrence of high unemployment and soaring inflation. He championed tax cuts, spending discipline, deregulation, free trade, and sound money as the foundation of an economic recovery.

In 1980, the highest marginal income-tax rate was 70 percent. In 1981, Reagan insisted on slashing it to 50 percent, and successfully pushed lowered tax rates across the board. In 1986, he got Congress to trim marginal income-tax rates again, bringing the highest rate down to 28 percent.

Here’s how economics writer Steve Moore has described the impact of Reagan’s policies: “After Reagan’s tax-rate cuts, real median family incomes, which had fallen sharply during the stagflationary period from 1977-82, rose by nearly 10 percent. From 1981 to 1989, every income quintile — from the richest to the poorest — gained income, according to the Census Bureau economic data. When Reagan left office the market had more than tripled in value…. The economy grew by more than one third.â€