The “Reagan Boom” not only produced widespread prosperity but generated budget surpluses in the 1990s

Obama should study 

the history of Reaganomics

by Paul G. Kengor

Reagan presided over the largest tax cut in American history and accomplished it in tandem with a huge Democratic Party majority in the House. It was a bipartisan triumph that The Washington Post called “one of the most remarkable demonstrations of presidential leadership in modern history.” Unlike President Obama, who derided his Republican congressional opposition as “hostage takers” and denounced their desire for tax cuts, Reagan found a way to work with the opposition to advance the country.

After a slow start through 1982-83, the stimulus effect of the Reagan tax cuts was unprecedented, sparking the longest peacetime expansion/recovery in the nation’s history: 92 consecutive months. The bogeymen of the 1970s — chronic unemployment and the deadly combination of double-digit inflation and interest rates — were vanquished. The poverty rate dropped; the standard of living soared. The Dow Jones industrial average, which, in real terms, had declined 70 percent from 1967-82, nearly tripled from 1983-89.

Contrary to liberal demonology, African Americans and other minorities did extremely well during the Reagan years. Real income for a median African American family had dropped 11 percent from 1977-82. But from 1982-89, coming out of the recession, it rose by 17 percent. In the 1980s, there was a 40 percent jump in African American households earning over $50,000.

African American unemployment (which has increased significantly under President Obama) fell faster than white unemployment in the 1980s. The number of African American-owned businesses increased by almost 40 percent while the number of African Americans enrolled in college increased by almost 30 percent (white college enrollment increased only 6 percent).

There were likewise impressive numbers for Hispanics and women. Hispanic-owned businesses in the 1980s grew by an astounding 81 percent and the number of Hispanics in college jumped 45 percent.

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