At one of the first CPAC’s, Ronald Reagan exhorted the GOP to raise “a banner of no pale pastels, but bold colors which make it unmistakably clear where we stand on all of the issues troubling the people.” Paul Ryan, who came of age during the Reagan’s Presidency, shares that view along with the vision for an alternative and much brighter future for America, if we have the courage to believe and to act.
In 1975, when Reagan made this speech, he recognized the Democrats’ views no longer aligned with the majority of the American people. He understood that the New Deal and the Great Society had run their courses and had been shown to be fundamentally flawed. They relied a mistaken notion that government somehow had the ability to efficiently allocate resources for hundreds of millions of people and that individuals did not want to be rewarded for their hard work and risk taking.
In the speech Reagan identified the following agenda as vital to restoring America’s promise:
1. Reduce federal spending and get the nation back to a balanced budget.
2. Lower tax rates and simplify the tax code.
3. Unleash the free market and recognize it, and not the federal government, as the primary provider for the people’s needs.
4. Restore sound money.
5. Roll back destructive job crushing regulations by the federal government.
6. Return to limited government; reverse the nation’s drift towards socialism.
In the years immediately following Reagan’s 1975 speech, the economic conditions grew even worse. Under the leadership of President Jimmy Carter and a Democratic Congress, the nation was experiencing double-digit inflation, interest rates of over 20%, rising unemployment on its way to above 10%, dropping real median incomes, and a rising poverty rate.
Paul Ryan identified the similarities to our time in a speech he gave at the Reagan Library this past May. “[T]he parallels between 1980 and today are so striking. Now, as then, we face not just a failed President, but a failed ideology. We face a pessimistic mood in the nation’s capital – a belief that our best days are over and the only thing left to do is manage the nation’s decline. But we have the same opportunity today, to reject this defeatist attitude and embrace a positive reform agenda capable of kick-starting a new era of prosperity.”
After becoming President in 1980, Reagan implemented much of the agenda that he identified during his CPAC address. His revolution included fundamental tax reform, ultimately lowering the rates to a top rate of 28% for individuals, while broadening the base and eliminating tax loopholes and tax shelters (which allowed the wealthy or politically connected to avoid tax liability). Reagan also slowed the growth of federal domestic spending to its lowest level since World War II: a great achievement, given the Democrats controlled the House for the entire eight years of his Presidency and the Senate for two of them. He also cut unnecessary and burdensome regulations on businesses and privatized government services performed better and more efficiently by the private sector.
The result of implementing the Reagan agenda was the greatest economic expansion in American history with over 19 million new jobs created with a population that was 85 million less than today. Unemployment dropped to 5 percent. Meanwhile, because of the incredible economic growth, revenues to the Treasury doubled.
Ryan’s plan incorporates all the key areas of Reagan’s agenda. It takes government spending head on including entitlements, which account for over 50% of the budget. It simplifies the tax code, bringing the top individual and corporate rates to 25% while closing loopholes and broadening the base. It also eliminates job-crushing regulations like those created by Obamacare. It facilitates a return to sound money by taking away the Federal Reserve’s need to print money to cover our nation’s debt, which is how 60% of our current deficit spending is financed. Overall, it promotes economic growth, which will lead to higher revenues to the Treasury and more jobs.
The President has already started demagoguing Ryan’s Plan, while speaking in broad platitudes about responsible spending (of borrowed and printed money) and investments in our future (echoing his rhetoric of 2008), but offering no plan. In a speech at Council Bluffs, Iowa earlier this week he said, “Paul Ryan’s vision is one that I fundamentally disagree with…They have tried to sell us to trickle down theory before. Guess what, every time it has been tried, it has not worked. It did not work then, it will not work now. It won’t create jobs, it won’t lower our deficit, it is not a plan to move our economy forward. We do not need more tax cuts for our wealthiest Americans, we need tax relief for working families.”
Mr. President, your recounting of the facts is entirely false. Reagan’s economy created more jobs in the year 1984 alone–4.1 million–than you’ve created in your entire Presidency. It brought hundreds of billions more in tax revenues, and got the economy moving again.
Reagan in his CPAC address said, “Our task is to make [the people] see that what we represent is identical to their own hopes and dreams of what America can and should be.” Ryan, in his Reagan Library speech, agreed saying, “A bold reform agenda is our moral obligation. We have an obligation to provide the American people with a clear path that gets our country back on track.” Then as now, it’s no time for pale pastels.