For what we are experiencing, as the economy digests the big Obama boondoggles of his first term and the big statist plans for his second, is the renaissance of the relevance of the four pillars of Reaganomics. No longer will it be necessary for some political aspirant to put a twist on the old supply-side ideas, to go for some clever repackaging and “updating,” to think outside of the box á la the blessed authors of Grand New Party from a few years ago. The old warhorse ideas will be precisely up to the task at hand.
Could you imagine what would happen if we cut taxes, reined in regulation, stabilized the dollar, and recommitted to world trade? Which is to say: what if the private economy were freed of impediments? The outsized growth that we last saw in the 1980s and the 1990s would come again today. Out of the trough of the recession in the 1980s, the economy grew 17% in three years, about triple the rate of the Obama recovery from the Great Recession. And after that momentous start in the mid-1980s, there was another fifteen years of real growth at 3-4%. This is the minimum we should expect from a program based on the four pillars of Reaganomics given our dilapidated state today. Maybe we could grow at 4-5% for the long term, since our current GDP denominator is so dismal, so low.