FREE ESSAY ON THE THEORY BEHIND REAGANOMICS

THE THEORY BEHIND REAGANOMICS

The theory behind Reaganomics was sound, but when applied in real life its consequences
are still present more than ten years after the fact. The tax cuts applied early in
Reagan's first term cemented the ideology for what the next eight years of his reign
would uphold. The Economic Recovery Tax Act would cut taxes roughly twenty five percent
over a three-year period. The ideology of Reagan's administration quickly received
supporters of what he was doing. Entailed in these tax cuts were reductions in welfare
programs which was also a popular idea amongst Reaganites. But what is puzzling is that
David Stockman held a large portion of the truth of these tax cuts from Reagan and the
public. 
What would occur with the ERTA was a substantial deficit. This deficit was not the intent
of Reagan. Reagan's intent was that the tax cuts would allow the public to have more
money. This additional money which would have otherwise been spent on taxes was supposed
to be put back in the economy by the people. The ability of people to now spend more on
homes, cars and other goods would boost the prosperity of the economy. But Stockman had a
theory of his own. He saw that this deficit would force Congress to make cuts of its own
on social programs. Stockman with held this information from the public and from Reagan
so that when Congress would reallocate funding, it would avoid giving it to social
programs. 
Stockman's theory does not make sense with the political views of the time. If Reagan and
the public were in favor of cutbacks on the welfare system, why would Stockman with hold
this information from a population who was in favor of the result? Stockman was an
intelligent man who for some time worked in the House of Representatives and had
connections to many people in Washington. He served as the budget director for the Reagan
Administration. As budget director, his intentions were to acquire a balanced budget by
the next term. 
Although Stockman's intentions for a balanced budget were good, what he did betrayed
Reagan and the public. He never had the authority to with hold such pertinent
information. If his intents were to maintain a balanced budget, why would he devise a
plan for such high tax cuts which would create the most unbalance budget our economy has
seen. It seems as if this overly intelligent scholar was attempting to achieve a task
that was way out of his power to do so. 
Later on Stockman revealed his secret to journalist William Greider. By him doing so
after the fact, and owning up to his wrongdoing is in no way redeeming. It reminds me of
when Robert S. MacNamara claimed that in retrospect he was wrong in sending all of those
troops to fight in Vietnam. Although the results of Stockman's actions did not cause the
death of thousands of young men and women, he in a sense did the same thing by claiming
he was wrong after the fact. 
The deficit caused by the Reagan Era is still present and is a concern to our economy.
However, the eighties was a time when the majority of America lived the high life, and
when the poor suffered the consequences. But in politics there will always be a group
that will feel the burden of some one else's pleasure. Now, the welfare state is
adequately funded, and those who lost the government aid that they relied on during
Reaganomics are once again receiving what they need.