The times when Reagan took office were in many ways similar to today. In the late 70s and early 80s, the nation witnessed its most severe recession since the Great Depression. Unemployment reached 10.8 percent and the labor force participation rate fell to approximately 60 percent, which is exactly where we are today. Deficits soared fueled in part by the largest peacetime military expansion in United States history to counter the Soviet Union’s massive military build up of the previous decade. However, Reagan’s $1.9 trillion in debt over eight years, adjusted for today’s dollars, still puts him over $2 trillion less than Obama’s $6 trillion total in four.
Social Security, then as now, was on a path to insolvency and the nation’s tax system had become so burdensome (with a top marginal rate of 70%), antiquated and complicated that America struggled to compete in the global economy. Add to these challenges soaring gas prices, double-digit inflation and interest rates, and trying to work with a divided Congress, and Reagan faced a task every bit as great as Obama’s upon taking office, if not more so.
Bill Clinton proclaimed during his nomination speech of Obama a few weeks ago that neither he, Clinton, nor any other President could have turned around an economy as bad as the one Obama inherited in just one term. Actually that is not true: Reagan did. By his re-election year of 1984, the nation’s economy was humming again with a 7.2 percent GDP growth rate, adding over 4 million jobs in that year alone and 9 million during his first term.
Unlike President Obama, Reagan waded into the political fray from the moment he took office. He took the lead in bringing about political compromise, which moved the nation closer towards his goals. He worked with Republicans and Democrats in the House and Senate to pass Social Security reform, which extended the life of the program for decades. He passed the most expansive tax reform bills in modern history, which closed many loopholes and tax avoidance havens while lowering the top rate ultimately to 28 percent.
Reagan also supported the bi-partisan Gramm-Rodman-Hollings deficit reduction law, which put our nation’s deficits on a downward trajectory. He initiated the Grace Commission to find waste and inefficiencies in government and implemented the majority of its Executive branch recommendations. Not surprisingly the growth of domestic spending fell to its lowest rate since World War II. Reagan also deregulated the oil industry and encouraged domestic energy exploration. The result was that gas prices declined over 20 percent during his time in office.
Contrast Reagan’s leadership in bringing about economic growth and reducing government spending, with Obama’s absence from the battlefield. He appears unwilling to get his hands dirty on anything that might cost him politically, save ObamaCare and the $887 billion Stimulus Bill. He has offered no viable plan to fix our entitlement programs including Social Security and Medicare, though he is more than willing to demagogue Mitt Romney and Paul Ryan with platitudes about standing by our seniors (while these programs go bankrupt).
Rather than embrace the Simpson-Bowles deficit reduction report he commissioned, he will not commit to making the kinds of changes the bi-partisan group calls for, including spending cuts and true pro-growth tax reform. And regarding energy production, despite gas prices doubling since he took office, his Administration unfathomably blocked the Keystone XL Pipeline. Meanwhile, his EPA is seeking to implement climate change regulations that will shut down coal fired power plants and cause our energy prices to soar, while costing American jobs.
The policies each President implemented and the prosperity each brought about or failed to bring about stem from their governing philosophies. Reagan famously said in his Inaugural Address regarding the economy, “in this present crisis government is not the solution to our problem, government is the problem.” Obama proclaimed in his Inaugural Address, “the question is not whether government is too big or too small, but whether it works.” Reagan’s laser-like focus on unleashing the private sector brought about the greatest expansion of the economy in United States history and a 5 percent unemployment rate. Obama’s focus on growing the government and trying to use it to revive the economy has created the highest sustained unemployment rate since the Great Depression and the largest deficits in our nation’s history.
As a young voter in 1988, the choice for me--and the country--was clear: it was a go forward election. I pulled the lever for Bush. He won in the landslide. In 2012, as a more seasoned voter, the choice is every bit as clear, it is time for a change.