In praise of a truly great President. Y’know, as opposed to the neo-Marxist trainwreck of a dictator we have now.
Reagan inherited President Jimmy Carter’s anemic economy. He cut taxes and with Paul Volcker as his guide cut inflation. He put the economy on a growth curve for years thereafter. Yet, as Shlaes points out, he failed to reduce the deficit — though he did reduce it as a percentage of GDP — and he failed to cut the federal budget.
Coolidge did. In fact, he cut the top income tax rate to 25 percent, three percentage points lower than Reagan’s historic 1986 tax cuts, and the economy grew. Coolidge reduced the national debt from $28 billion to $17.65 billion with a combination of economies and tax cuts. He actually balanced the budget. When, in 1929, he returned to his Massachusetts home he left the federal budget smaller than it was when he had arrived in 1921. Of equal importance, the economy was now solidly growing.
The unemployment rate that was at 5.7 million in July 1921 had dropped to 1.8 million. Manufacturing had climbed by a third since 1921 and iron and steel production had doubled. Finally, the revenue acts of 1921, 1924, and 1928 represented strong growth despite tax reduction. Something was working.
Funny how that mysterious, inexplicable “something” has worked every single time it’s been tried. Which is more than you’ll ever be able to say about Ogabe’s schoolboy socialism. Thus:
Coolidge’s secretary of the treasury, Andrew Mellon, called it “scientific taxation.” Today we would call his tax plan supply-side economics. By cutting marginal tax rates Coolidge and Mellon goaded economic activity and raised tax revenue. Yet through all the years of his presidency Coolidge along with his secretary of the treasury Mellon had to fight off big spenders, not only the Democrats but also those Republicans infected with a kind of influenza for Big Government called progressivism. There were great projects such as the hydroelectric project called Muscle Shoals and there were noble gestures such as the veterans’ pensions that kept the pressure on the Administration to spend and tax and burst the budget.
Cal resisted most of these impulses with his pocket veto and fifty vetoes, but it wore him down. In 1927 he cryptically signed a message to the world, “I do not choose to run for President in Nineteen Twenty-Eight.” Hoover ran and returned the progressive impulse to Washington.
And that was the beginning of the long, dreary end for America That Was.