Editing Reaganomics (section)

==Analysis==
[[File:Job Growth by U.S. President - v1.png|thumb|right|350px|Job growth by U.S. President, measured as cumulative percentage change from month after inauguration to end of term. Reagan was second only to Clinton post-1980.<ref>{{cite web| url = https://fred.stlouisfed.org/series/PAYEMS| title = Federal Reserve Economic Data-All Employees Total Non-Farm-Retrieved July 29, 2018| date = January 1939| access-date = December 30, 2017| archive-date = August 18, 2021| archive-url = https://web.archive.org/web/20210818204529/https://fred.stlouisfed.org/series/PAYEMS| url-status = live}}</ref>]]
[[File:Presidential Comparison Real GDP - v1.png|thumb|right|350px|U.S. cumulative real (inflation-adjusted) GDP growth by President.<ref>{{cite web| url = https://fred.stlouisfed.org/series/GDPC1| title = FRED-Real GDP-Retrieved July 1, 2018| date = January 1947| access-date = July 1, 2018| archive-date = August 18, 2021| archive-url = https://web.archive.org/web/20210818210235/https://fred.stlouisfed.org/series/GDPC1| url-status = live}}</ref>]]

According to a 1996 study<ref name="Niskanen1996">(October 22, 1996) – [http://www.cato.org/pubs/pas/pa261.html Supply-Side Tax Cuts and the Truth about the Reagan Economic Record] {{Webarchive|url=https://web.archive.org/web/20210922034211/https://www.cato.org/pubs/pas/pa261.html |date=September 22, 2021 }}, by [[William A. Niskanen]] and Stephen Moore</ref> by the [[Cato Institute]], a libertarian think tank, on 8 of the 10 key economic variables examined, the American economy performed better during the Reagan years than during the pre- and post-Reagan years. The study asserted that real median family income grew by $4,000 during the eight Reagan years and experienced a loss of almost $1,500 in the post-Reagan years. Interest rates, inflation, and unemployment fell faster under Reagan than they did immediately before or after his presidency. The only economic variable that was lower during period than in both the pre- and post-Reagan years was the savings rate, which fell rapidly in the 1980s. The productivity rate was higher in the pre-Reagan years but lower in the post-Reagan years.<ref name="Niskanen1996"/> The Cato study was dismissive of any positive effects of tightening, and subsequent loosening, of Federal Reserve monetary policy under "inflation hawk" [[Paul Volcker]], whom President Carter had appointed in 1979 to halt the persistent inflation of the 1970s.

Economic analyst [[Stephen Moore (writer)|Stephen Moore]] stated in the Cato analysis, "No act in the last quarter century had a more profound impact on the U.S. economy of the eighties and nineties than the Reagan tax cut of 1981." He argued that Reagan's tax cuts, combined with an emphasis on federal monetary policy, deregulation, and expansion of free trade created a sustained economic expansion, the greatest American sustained wave of prosperity ever. He also claims that the American economy grew by more than a third in size, producing a $15 trillion increase in American wealth. Consumer and investor confidence soared. Cutting federal income taxes, cutting the U.S. government spending budget, cutting programs, scaling down the government work force, maintaining low interest rates, and keeping a watchful inflation hedge on the monetary supply was Ronald Reagan's formula for a successful economic turnaround.<ref name="Niskanen1996"/>

[[Milton Friedman]] stated, "Reaganomics had four simple principles: Lower marginal tax rates, less regulation, restrained government spending, noninflationary monetary policy. Though Reagan did not achieve all of his goals, he made good progress."<ref name="Friedman">{{cite web|url=http://www.cato.org/sites/cato.org/files/serials/files/policy-report/1993/8/v15n4.pdf|title=The Real Free Lunch: Markets and Private Property|access-date=June 12, 2018|archive-date=December 12, 2019|archive-url=https://web.archive.org/web/20191212175301/https://www.cato.org/sites/cato.org/files/serials/files/policy-report/1993/8/v15n4.pdf|url-status=live}}</ref>

The [[Tax Reform Act of 1986]] and its impact on the [[alternative minimum tax]] (AMT) reduced nominal rates on the wealthy and eliminated tax deductions, while raising tax rates on lower-income individuals.<ref name="Friedman"/><ref name="Heritage">{{cite web|url=http://www.heritage.org/research/lecture/reaganomics-and-conservatisms-future-two-lectures-in-china|title=Reaganomics and Conservatism's Future: Two Lectures in China|first=Burton|last=Yale|website=The Heritage Foundation|access-date=June 12, 2018|archive-date=December 25, 2016|archive-url=https://web.archive.org/web/20161225050612/http://www.heritage.org/research/lecture/reaganomics-and-conservatisms-future-two-lectures-in-china|url-status=unfit}}</ref><ref>{{cite web |url=http://taxfoundation.org/article/us-federal-individual-income-tax-rates-history-1913-2011-nominal-and-inflation-adjusted-brackets/ |title=U.S. Federal Individual Income Tax Rates History, 1913-2011 (Nominal and Inflation-Adjusted Brackets) &#124; Tax Foundation |access-date=August 11, 2012 |url-status=dead |archive-url=https://web.archive.org/web/20120805034153/http://taxfoundation.org/article/us-federal-individual-income-tax-rates-history-1913-2011-nominal-and-inflation-adjusted-brackets |archive-date=August 5, 2012 }}</ref><ref name="Ferrara">Ferrara, Peter (May 5, 2011).[https://www.forbes.com/sites/peterferrara/2011/05/05/reaganomics-vs-obamanomics-facts-and-figures/ Reaganomics Vs. Obamanomics: Facts And Figures] {{Webarchive|url=https://web.archive.org/web/20170910183516/https://www.forbes.com/sites/peterferrara/2011/05/05/reaganomics-vs-obamanomics-facts-and-figures/ |date=September 10, 2017 }}. ''Forbes''</ref> The across the board tax system reduced marginal rates and further reduced [[bracket creep]] from inflation. The highest income earners (with incomes exceeding $1,000,000) received a tax break, restoring a flatter tax system.<ref name="Leiserson">{{cite web |last=Leiserson |first=Greg |url=http://www.taxpolicycenter.org/UploadedPDF/411703_individual_amt.pdf |title=The Individual Alternative Minimum Tax: Historical Data and Projections |year=2008 |publisher=[[Brookings Institution]] & [[Urban Institute]] |access-date=July 29, 2008 |archive-date=September 10, 2008 |archive-url=https://web.archive.org/web/20080910034202/http://www.taxpolicycenter.org/UploadedPDF/411703_individual_amt.pdf |url-status=dead }}</ref> In 2006, the IRS's National Taxpayer Advocate's report characterized the effective rise in the AMT for individuals as a problem with the tax code.<ref>{{cite web |url=https://www.irs.gov/pub/irs-utl/arc-exec_summary-2006.pdf |title=National Taxpayer Advocate 2006 Annual Report to Congress – Executive Summary |publisher=[[Internal Revenue Service]] |access-date=July 29, 2008 |archive-date=June 25, 2008 |archive-url=https://web.archive.org/web/20080625032949/https://www.irs.gov/pub/irs-utl/arc-exec_summary-2006.pdf |url-status=live }}</ref> Through 2007, the revised AMT had brought in more tax revenue than the former tax code, which has made it difficult for Congress to reform.<ref name="Leiserson"/><ref>{{cite news |url=http://topics.nytimes.com/top/reference/timestopics/subjects/a/alternative_minimum_tax/index.html |title=Alternative Minimum Tax |year=2008 |newspaper=The New York Times |access-date=July 29, 2008 |first1=Carl |last1=Hulse |first2=Suevon |last2=Lee |archive-date=June 16, 2008 |archive-url=https://web.archive.org/web/20080616112718/http://topics.nytimes.com/top/reference/timestopics/subjects/a/alternative_minimum_tax/index.html |url-status=live }}</ref>

Economist [[Paul Krugman]] argued the economic expansion during the Reagan administration was primarily the result of the [[business cycle]] and the monetary policy by [[Paul Volcker]].<ref name="Roubini-1997">{{cite news | url=http://people.stern.nyu.edu/nroubini/SUPPLY.HTM | work=Stern School of Business | title=Supply Side Economics: Do Tax Rate Cuts Increase Growth and Revenues and Reduce Budget Deficits ? Or Is It Voodoo Economics All Over Again? | year=1997 | access-date=January 10, 2012 | first1=Nouriel | last1=Roubini|authorlink1=Nouriel Roubini}}</ref> Krugman argues that there was nothing unusual about the economy under Reagan because unemployment was reducing from a high peak and that it is consistent with Keynesian economics for the economy to grow as employment increases if inflation remains low.<ref name="krugman">{{Harvnb|Krugman|2004}}: "The secret of the long climb after 1982 was the economic plunge that preceded it. By the end of 1982 the recession in U.S. economy was deeply depressed, with the worst unemployment rate since the Great Depression. So there was plenty of room to grow before the economy returned to anything like full employment."</ref> Krugman has also criticized Reaganomics from the standpoint of wealth and income inequality. He argues that the Reagan era tax cuts ended the post-World War II "Great Compression" of wealth held by the rich.<ref>Krugman, Paul. ''The Conscience of a Liberal'', 2007, W.W. Norton & Co. {{ISBN|0-393-06069-1}} p. 46-48, 145.</ref>

The CBO Historical Tables indicate that federal spending during Reagan's two terms (FY 1981–88) averaged 22.4% GDP, well above the 20.6% GDP average from 1971 to 2009. In addition, the public debt rose from 26.1% GDP in 1980 to 41.0% GDP by 1988. In dollar terms, the public debt rose from $712 billion in 1980 to $2,052 billion in 1988, a three-fold increase.<ref name="CBO Historical Tables"/> Krugman argued in June 2012 that Reagan's policies were consistent with Keynesian stimulus theories, pointing to the significant increase in per-capita spending under Reagan.<ref>{{cite news|url=https://www.nytimes.com/2012/06/08/opinion/krugman-reagan-was-a-keynesian.html|title=Opinion - Reagan Was a Keynesian|first=Paul|last=Krugman|access-date=June 12, 2018|newspaper=The New York Times|date=June 7, 2012|archive-date=June 12, 2018|archive-url=https://web.archive.org/web/20180612210722/https://www.nytimes.com/2012/06/08/opinion/krugman-reagan-was-a-keynesian.html|url-status=live}}</ref>

[[William A. Niskanen|William Niskanen]] noted that during the Reagan years, privately held federal debt increased from 22% to 38% of GDP, despite a long peacetime expansion. Second, the [[savings and loan crisis|savings and loan problem]] led to an additional debt of about $125 billion. Third, greater enforcement of U.S. trade laws increased the share of U.S. imports subjected to trade restrictions from 12% in 1980 to 23% in 1988.<ref name="nisk_concise"/>

Economists [[Raghuram Rajan]] and [[Luigi Zingales]] pointed out that many deregulation efforts had either taken place or had begun before Reagan (note the deregulation of airlines and trucking under Carter, and the beginning of deregulatory reform in railroads, telephones, natural gas, and banking). They stated, "The move toward markets preceded the leader [Reagan] who is seen as one of their saviors."<ref>[[Saving Capitalism from the Capitalists]] p. 268.</ref> Economists [[Paul Joskow]] and Roger Noll made a similar contention.<ref>''American Economic Policy in the 1980s,'' ed. Martin Feldstein, NBER 1994, pp. 371–72.</ref>

Economist [[William A. Niskanen]], a member of Reagan's Council of Economic Advisers wrote that deregulation had the "lowest priority" of the items on the Reagan agenda<ref name="nisk_concise"/> given that Reagan "failed to sustain the momentum for deregulation initiated in the 1970s" and that he "added more trade barriers than any administration since Hoover." By contrast, economist [[Milton Friedman]] has pointed to the number of pages added to the [[Federal Register]] each year as evidence of Reagan's anti-regulation presidency (the Register records the rules and regulations that federal agencies issue per year). The number of pages added to the Register each year declined sharply at the start of the Ronald Reagan presidency breaking a steady and sharp increase since 1960. The increase in the number of pages added per year resumed an upward, though less steep, trend after Reagan left office. In contrast, the number of pages being added each year increased under Ford, Carter, George H. W. Bush, Clinton, George W. Bush, and Obama.<ref>{{Cite news |last=Friedman |first=Milton |date=June 11, 2004 |title=Freedom's Friend |newspaper=The Wall Street Journal |url=http://www.hoover.org/publications/digest/3020261.html |access-date=December 30, 2006 |url-status=dead |archive-url=https://web.archive.org/web/20060927151918/http://www.hoover.org/publications/digest/3020261.html |archive-date=September 27, 2006 }}</ref> The number of pages in Federal Register is however criticized as an extremely crude measure of regulatory activity, because it can be easily manipulated (e.g. font sizes have been changed to keep page count low).<ref>{{cite web|url=http://www.heritage.org/research/reports/2004/09/reining-in-the-regulators-how-does-president-bush-measure-up|title=Reining in the Regulators: How Does President Bush Measure Up?|author=James Gattuso|date=September 28, 2004|publisher=[[The Heritage Foundation]]|access-date=August 21, 2011|archive-date=August 8, 2011|archive-url=https://web.archive.org/web/20110808090330/http://www.heritage.org/Research/Reports/2004/09/Reining-in-the-Regulators-How-Does-President-Bush-Measure-Up|url-status=unfit}}</ref> The apparent contradiction between Niskanen's statements and Friedman's data may be resolved by seeing Niskanen as referring to ''statutory'' deregulation (laws passed by Congress) and Friedman to ''administrative'' deregulation (rules and regulations implemented by federal agencies). A 2016 study by the Congressional Research Service found that Reagan's average annual number of final federal regulatory rules published in the Federal Register was higher than during the Clinton, George W. Bush or Obama's administrations, even though the Reagan economy was considerably smaller than during those later presidents.<ref>{{cite web |date=3 September 2019 |title=Counting Regulations: An Overview of Rulemaking, Types of Federal Regulations, and Pages in the Federal Register |url=https://sgp.fas.org/crs/misc/R43056.pdf |access-date=10 August 2022 |website=FAS Project on Government Secrecy |archive-date=September 1, 2022 |archive-url=https://web.archive.org/web/20220901045011/https://sgp.fas.org/crs/misc/R43056.pdf |url-status=live }}</ref> Another study by the QuantGov project of the libertarian [[Mercatus Center]] found that the Reagan administration added restrictive regulations — containing such terms as "shall," "prohibited" or "may not" — at a faster average annual rate than did Clinton, Bush or Obama.<ref>{{cite web|url=https://www.factcheck.org/2018/01/trumps-numbers/|title=Trump's Numbers - FactCheck.org|date=January 19, 2018|access-date=June 12, 2018|archive-date=June 11, 2018|archive-url=https://web.archive.org/web/20180611172512/https://www.factcheck.org/2018/01/trumps-numbers/|url-status=live}}</ref>

[[Greg Mankiw]], a conservative Republican economist who served as chairman of the [[Council of Economic Advisers]] under President George W. Bush, wrote in 2007:
<blockquote>I used the phrase "charlatans and cranks" in the first edition of my principles textbook to describe some of the economic advisers to Ronald Reagan, who told him that broad-based income tax cuts would have such large supply-side effects that the tax cuts would raise tax revenue. I did not find such a claim credible, based on the available evidence. I never have, and I still don't ... My other work has remained consistent with this view. In a paper on dynamic scoring, written while I was working at the White House, Matthew Weinzierl and I estimated that a broad-based income tax cut (applying to both capital and labor income) would recoup only about a quarter of the lost revenue through supply-side growth effects. For a cut in capital income taxes, the feedback is larger — about 50 percent — but still well under 100 percent. A chapter on dynamic scoring in the 2004 Economic Report of the President says about the same thing.<ref>{{cite web|url=https://gregmankiw.blogspot.com/2007/07/on-charlatons-and-cranks.html|title=Greg Mankiw's Blog: On Charlatans and Cranks|access-date=16 June 2018}}</ref></blockquote>

[[Glenn Hubbard (economist)|Glenn Hubbard]], who preceded Mankiw as Bush's CEA chair, also disputed the assertion that tax cuts increase tax revenues, writing in his 2003 Economic Report of the President: "Although the economy grows in response to tax reductions (because of higher consumption in the short run and improved incentives in the long run), it is unlikely to grow so much that lost tax revenue is completely recovered by the higher level of economic activity."<ref>{{cite web |url=http://www.presidency.ucsb.edu/economic_reports/2003.pdf |title=Archived copy |access-date=June 16, 2018 |archive-date=November 14, 2017 |archive-url=https://web.archive.org/web/20171114180105/http://www.presidency.ucsb.edu/economic_reports/2003.pdf |url-status=dead }}</ref>

In 1986, [[Martin Feldstein]] — a self-described "traditional supply sider" who served as Reagan's chairman of the [[Council of Economic Advisers]] from 1982 to 1984 — characterized the "new supply siders" who emerged circa 1980:

<blockquote>What distinguished the new supply siders from the traditional supply siders as the 1980s began was not the policies they advocated but the claims that they made for those policies ... The "new" supply siders were much more extravagant in their claims. They projected rapid growth, dramatic increases in tax revenue, a sharp rise in saving, and a relatively painless reduction in inflation. The height of supply side hyperbole was the "Laffer curve" proposition that the tax cut would actually increase tax revenue because it would unleash an enormously depressed supply of effort. Another remarkable proposition was the claim that even if the tax cuts did lead to an increased budget deficit, that would not reduce the funds available for investment in plant and equipment because tax changes would raise the saving rate by enough to finance the increased deficit ... Nevertheless, I have no doubt that the loose talk of the supply side extremists gave fundamentally good policies a bad name and led to quantitative mistakes that not only contributed to subsequent budget deficits but that also made it more difficult to modify policy when those deficits became apparent.<ref>{{cite web |last=Feldstein |first=Martin |title=NBER Working Paper Series |url=https://www.nber.org/papers/w1792.pdf |access-date=9 August 2022 |website=National Bureau of Economic Research |archive-date=June 2, 2018 |archive-url=https://web.archive.org/web/20180602123714/http://www.nber.org/papers/w1792.pdf |url-status=live }}</ref></blockquote>