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Monday, July 22, 1996

Reaganomics led to boom, not bust in nation's economy

Because it is an election year, l feel it is fitting to make a few comments about a president. However, l wish to discuss the administration of a former president, Ronald Reagan. This is the tricky part. I'm not Republican, but I'm going to say some good stuff about the Reagan administration. That's right, good stuff; conservatives may not be surprised, but you liberals just hear me out. Ronald Reagan may be one of the greatest presidents this country has ever had. Let's forget the trillion-dollar deficit for a minute. I'm not an ultra-conservative Republican (go Bill!), but his administration accomplished what no other has ever done. He won a war without shedding a single human life. He led the United States to victory and avoided what would have been the most destructive war ever. He won the Cold War.

His actions and programs had a dramatic effect on the domestic economy. His expensive defense programs opened the door for an economic boom. As a result, he defeated the Soviet Union by out-spending them. He took his White House credit card and charged everything. The results were unbelievable; the U.S. economy exploded. His credit card economics (buy now, pay later) allowed technology to boom. He continued to pour money into new defense technology such as "Star Wars" and other projects to improve the U.S military forces. This resulted in unprecedented success for the economy. His two-term presidency resulted in the creation of 19 million new jobs. National unemployment in 1988 reached 5.3 percent, the lowest level since the early 1970s (it has again reached 5.3 percent under Clinton ­ Go Bill!). Manufacturing rose sharply allowing exports to increase dramatically as well.

The economy was making Americans money, producing many wealthy people. When Reagan's term began in 1980, there were a little over half a million individual millionaires, judging by assets, in the United States. By the end of his presidency in 1988, that number had more than doubled. Furthermore, according to Forbes magazine, the number of billionaires also doubled ­ from 26 in 1981 to 52 in 1988. By 1988, one in five adults came from households with an income of over $50,000 a year, compared with one in 10 in 1983. Even allowing for an adjustment in inflation, these gains are still very impressive today.

More jobs continued to develop as Reagan spent billions on the defense industry. The question which begs to be asked is: "How did all this spending defeat the Soviet Union?" Simply, the Soviet Union was unable to maintain pace with the high scale spending of the United States. Their attempt to keep up with the United States eventually destroyed their economy. While intense spending toward the defense industry in the United States had a positive impact on the economy, the results were the opposite for the Communist Soviet Union. Spending more on defense resulted in less for its people. Everyday goods, such as bread, grew less available to Soviet citizens. Frustration among its people grew, and the rest is history: Wall comes down, communism falls and the Cold War ends.

Reagan's opponents often blame today's economic problems on his deficit spending. Unfortunately, the trillion-dollar deficit increases by $50,000 dollars every hour from interest alone; however, the 1980s were a war-time economy. There were not any physical battles; instead, the battle was fought with

the threat of retaliation and mutually assured destruction. The nation with the greatest retaliatory forces would become the most dominant. Reagan won this battle with deficit spending. The Soviet Union could not keep up, and their spending destroyed their economy. Reagan's spending, however, bolstered the United States economy. He had to take the necessary measures to win a war. Increasing the national debt was an unfortunate result of Reagan's plans. Nevertheless, his administration was a successful one. The Cold War did come to an end, and not a single life was lost in the process. If you ask me, avoiding a war is worth any trillion-dollar deficit.

Reagan does have more than his share of critics. His cutbacks on social welfare and tax breaks for the rich were issues which were unfavorable for a large portion of the population. Again, these sacrifices were necessary in a wartime economy. Reagan and his family were recipients of social welfare programs under Franklin Delano Roosevelt; however, certain programs had to suffer for the effort in the Cold War. In order to maintain a strong economy, Reagan gave the upper-class portion of the population tax breaks. He hoped that this would leave more money for them to spend, invest and in turn maintain a stable economy.

Reagan's actions benefited a small minority of the population, yet he served two terms and won both elections by rather large margins. Politicians cater to those who they know will vote. Only half of all eligible voters vote. And who do you think these are? They are disproportionately comprised of Cadillac-owning, generally conservative, upper-class citizens. In 1984, almost one-third of Reagan's votes came from the highest income brackets in the country. For example, 75 percent of those eligible in the upscale Pacific Palisades voted, compared to 25 percent in the South Bronx. Reagan cut social welfare programs, gave the wealthiest fifth of the population a tax cut and won by a landslide in 1984. Regardless of who voted for him, he made fundamental decisions and sacrifices which made the United States the victor in the battle against communism and the Cold War.

While on the subject of voting, as a college student and a member of "Generation X," it's frustrating to sit back and watch the upper 20 percent of the country make decisions which affect me. I haven't met a student yet who is in favor of Pete Wilson and all his cuts in education. We are the ones that are affected, yet we are the ones who are not voting. As a group, we can only be heard if we give politicians a reason to listen. If we don't vote, they will not listen. There are over a half-million college students in California alone, all of which are potential voters. Politicians will listen much more closely to a half-million votes, than they will to a thousand-person college demonstration. If you were not in favor of some of Reagan's programs, where were you? Did you just voice your opinion, or did you actually vote? OK, you were too young then. Where will you be this fall?

Ben Mohandesi is a third-year history student.