© 2024 KMUW
Play Live Radio
Next Up:
0:00
0:00
0:00 0:00
Available On Air Stations

Past & Present: Reaganomics Remains No Laughing Matter

Ronald Reagan, during his presidency, promoted an economic policy that came to be known as Reaganomics. Linked with economist Arthur Laffer’s theory of supply-side economics, Reaganomics claimed that economic growth could be promoted by dramatically reducing the tax burden of America’s wealthiest citizens. They, in turn, would use this tax relief to spend and invest more. This new spending, theoretically, would then stimulate the economy and create new jobs.

Reaganomics’ clearly “top-down” approach to economic growth also contributed to it being called “trickle-down economics.”

In retrospect, most credible economists regard supply-side economics as a fanciful theory that did not work as intended. It did, however, further enhance the financial status of this country’s well-off. Between 1980 and 2009, the percentage of national income going to America’s top one-fifth of earners grew from 43.7 percent to 50.3 percent.

Sadly, from the standpoint of contemporary Kansans, many state political officials, obviously ignoring history, seemingly still believe that supply-side economics-based tax cuts can both stimulate the economy and increase tax revenues. Unfortunately, as simple arithmetic reveals, decreased revenue, coupled with ongoing financial obligations, results in financial disaster.

During the GOP presidential primary of 1980, George H.W. Bush ridiculed Reagan’s proposed economic agenda as “Voodoo Economics.” While that assertion contains some humorous connotations, for citizens negatively impacted by supply-side economics, both past and present, it was and remains no laughing matter.

Robert E. Weems Jr. is the Willard W. Garvey Distinguished Professor of Business History at Wichita State University.