What Will History Say About Reagan?

In the second part of your Reagan legacy series, it is claimed that “interest rates are sharply lower than when he (Reagan) took office.” This is only a true statement if nominal interest rates are considered. The real, or inflation-adjusted, interest rates of the Reagan regime are the highest in American history and average at least twice those of the Carter years.

For example, using the data tables that appear in The Times, the real rate of interest in 1980, Carter’s last year in office, was 3%. Contrast this with real rates of interest of 10% in 1981, 11 1/2% in 1982, 7% in 1983, 8% in 1984, 6% in 1985, 7% in 1986, 4% in 1987 and an estimated 5% in 1988.

Since it is the real rate that correctly measures what consumers and producers are actually paying, it should come as no surprise that the America can’t compete internationally with Japan or West Germany, which average real rates of 1%-2%.

BERNADETTE L. LOCH

Bellflower