Ronald Reagan and the Economy of the Eighties

“Far too many in our Nation’s capital have come to believe that progress is the result of passing laws and regulations. But . . . that isn’t so. It’s opportunities for hard work and risk-taking by people like yourselves that keeps this country building and growing. And more often than not, you’re doing it in spite of the roadblocks put in your way by government.” – Ronald Reagan

Many lies, myths and distortions have been perpetrated about the 1980’s and the economic effect of Ronald Reagan’s policies. It has been said that only the richer got richer and the poor got poorer, that minorities were ignored and were negatively impacted and that Reagan tax cuts were for the rich and worsened the United States’ budget deficit. Here are the facts so we can set the record straight:

1. For seven years in a row, (1983-89) the economic growth of the United States averaged 4%.

2. Total tax revenue increased by 99.4% from the beginning of the decade to the end. Inflation-adjusted tax revenue increased 28%.

3. The percentage of the tax rate paid by the wealthiest 1% of the population increased from 26.8% to 32.7%.

4. Average real family income grew by more than 15% from 1982 to 1989.

5. The percent of families who earned $50,000 or more (1990 dollars) increased from 25% in 1980 to 31% 1990.

6. The percentage of families that earned under $15,000 dropped.

7. Of those who were in the bottom-fifth of income earners at the beginning of the decade, 86% jumped at least one bracket, and 65% jumped at least two brackets during the decade.

8. More of the bottom-fifth income earners ended up in the top-fifth bracket by 1990 than stayed in the bottom-fifth.

9. Families who earned between $10,000 to $50,000 grew in net worth at a higher percentage than those in the top-one-fifth income group.

10. The bottom 60% income earners paid 20% less in total tax revenue in 1990 than in 1980.

11. Black families with incomes of $25,000 or more grew 50% from 1979 to 1989.

12. From 1983 to 1989, the population earning below the poverty line decreased by 3.8 million people.

13. 20 million jobs were created, 82% of them being high-skilled, high-paying jobs.

14. Unemployment dropped from 9.6% to 5.3% during his administration, the largest drop in recent history.


See:

- U.S. Bureau of the Census

- U.S. Treasury’s Office of Tax Analysis

- U.S. Office of Budget and Management

- William A. Niskanen and Stephen Moore, “Cato Policy Analysis No. 261, Supply-Side Tax Cuts and the Truth About the Reagan Economic Record,” Cato Institute, October 22, 1996.

- “The Real Reagan Record,” National Review, August 31, 1992.

- Lawrence Kudlow, “Lest We Forget: Ronald Reagan Changed the World for the Better,” Investor’s Business Daily, February 15, 2002

- Grover Norquist, “Reagan’s Legacy 20 Years Later: The Kemp-Roth Tax Cut Anniversary,” U.S. Newswire, August 13, 2001

- Daniel J. Mitchell, “Lowering Marginal Tax Rates: The Key to Pro-Growth Tax Relief,” Heritage Foundation Backgrounder, Number 1443, May 22, 2001

- Bruce Bartlett, “Not So Stimulating,” National Review, November 16, 2001

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This is an old Facebook note I did, with some changes. New posts are coming next week!