Tuesday, March 29, 2011

We Must Keep the Legacy of Reaganomics Alive

Last week I had the honor and privilege of participating in the Reagan Centennial celebration here in New York City. It was truly a wonderful event put together by the Reagan Presidential Foundation, the Manhattan Institute, and the Wall Street Journal. Almost all of the key surviving architects of Reaganomics were gathered together.

The purpose of the event, “Supply-Side Economics: From the Reagan Era to Today,” was to review four key principles of economic growth initiated by President Reagan: Low tax rates on a broad economic base, sound monetary policy, free trade, and sensible regulatory policy.

These principles are what unleashed a wave of economic growth that led to an era of unprecedented prosperity here in America. And these same principles can restore our country to prosperity today.

Joining me in a special panel discussion moderated by CNBC’s Maria Bartiromo were two terribly bright thinkers: Lew Lehrman and Lawrence Lindsey. You can watch the entire conference at the Manhattan Institute. Here are a couple excerpts from my panel remarks.

Growth solves a lot of problems, okay? Growth solves budget problems, growth solves deficit problems, growth solves debt problems. I’m all for limiting spending. I just want to say that. Yes, yes indeed. We get back to 20 percent of GDP or less on spending, I am fine with that, okay? Fine with that. But I don’t see debt as this new red menace out there. What I see is growth as the Lord’s savior to the economy and our fiscal position. . . . Just make the dollar sound and keep marginal tax rates low. The economy will grow beautifully. But if the dollar falls, as it’s been falling for ten years — on the index it’s at a ten-year low, nearly — then it neutralizes the lower tax rates, you see what I’m saying? Because commodity prices soar and the capital flows outside the country, and it’s a dreadful policy. So, low tax rates, limited government. Keep the dollar sound.

Right now, Republican presidential candidates are beginning to prepare for the upcoming election and are formulating their respective policy agendas. The key question the GOP candidates should be asked is whether they have a real pro-growth agenda. This, along with a free-market focus and a strong dollar policy, is absolutely key.

We must keep the legacy of Reaganomics alive.