‘2nd Revolution Inspired World,’ Reagan Claims : Report Says He’ll Be 1st in 36 Years to Leave With Lower Inflation, Joblessness
President Reagan today proudly described the economic record of his Administration as a second American revolution that had inspired the world.
“Just as the first American Revolution, which began with the shot heard ‘round the world, inspired people everywhere who dreamed of freedom, so has this second American revolution inspired changes throughout the world.
“The message that we brought to Washington--reduce government, reduce regulation, restore incentives--has been heard around the world,” Reagan said in a foreword to his eighth and final economic report to Congress.
Reagan, who hands over office to George Bush on Jan. 20, will be the first President in 36 years to leave with both a lower inflation rate and a lower unemployment rate than when he entered the White House, according to the report.
Much of the 290-page report is a paean to the low-tax policies that fueled the expansion, which is now in its 74th month, a peacetime record.
But Reagan said he would be the first to admit that his agenda was not yet completed.
Federal spending has to be reduced further to close the budget deficit, he said. The trade gap needs to come down more, and inflation--"a hidden, insidious way of taxing the American people"--is still too high, the President said.
The economic report, prepared by the White House Council of Economic Advisers chaired by Beryl W. Sprinkel, said the Bush Administration should continue Reagan’s policies so these challenges can be met and the economic expansion sustained.
In 1989 the growth rate of the non-farm economy is likely to slow to 2.8% from 3.3% last year because of slower government spending, a more restrictive monetary policy and a pause for breath in the booming export sector, they said.
The economic forecasts, first published in late November, envisage overall economic growth of 3.5%, up from 2.6% in 1988. The drought reduced output last year by 0.7%.
The report said a slowdown in the non-farm economy would be welcome because it would ease inflationary pressures in industries that are operating flat out.
An important legacy of the Reagan Administration was said to be its success in creating a stable policy environment instead of tinkering constantly with spending, regulations and other levers of the economy.
Unfortunately, Reagan’s advisers lamented, the Federal Reserve still seems to overreact to short-run changes in economic indicators that are either temporary or illusory.