COLUMN RIGHT / MARTIN FELDSTEIN & KATHLEEN FELDSTEIN : Some History for Voters Under 30 : Do young Americans want or know the kind of change that the Democrats might bring?

Our two daughters who will be voting in this presidential election were only 8 and 10 years old when Ronald Reagan was elected President. Like the 40 million or so other eligible voters who are under 30, the young voters in our family haven’t had much experience with a Democratic administration.

Ronald Reagan appealed not only to his own generation of Americans, but also to a strong majority of young voters. Now we read that young Americans think it’s time for a change and are tending to support Bill Clinton and Al Gore.

We wonder whether young Americans want or know the kind of change that a Democratic administration under Clinton and Gore might bring. It may be helpful for them to think about why America’s younger voters preferred Reagan and George Bush in 1980 to Jimmy Carter and Walter Mondale. The same reasons should caution them about electing a Democrat to the White House to collaborate with a House and Senate that will inevitably be controlled by the Democrats.

Ronald Reagan came into office on a wave of popular disgust with government. While many voters now still express disgust with the federal government and with the members of Congress, they hope that a new team in the White House might enact policies that will help them and the economy. In contrast to the Clinton-Gore campaign to make government more active, Reagan’s promise to “get government off our backs” appealed to voters who were troubled by the extent to which government did harm by interfering in the economy and in the private lives of Americans. Reagan was elected and reelected overwhelmingly because his message appealed not only to Republicans, but also to many Democrats who had traditionally wanted more government spending and intervention.

What were the important economic factors in 1980 that contributed to Carter’s defeat and that might well recur under a Democratic administration that favors increased government spending?

In the late 1970s, the inflation rate rose from 4.9% in 1976 to more than 12% in 1979-80. High inflation brought with it high mortgage rates that made it impossible for most young people to buy a home. With mortgage interest rates now down to 8%, millions of young people can qualify as mortgage borrowers who couldn’t in the past.

The inflation problem had its roots in the policies pursued by Lyndon Johnson in the 1960s. In the decade before Johnson became President, prices rose at less than 2% a year. When Johnson left office, prices were rising at more than 6%.

The combination of inflation and an unindexed tax system pushed middle-income individuals into sharply higher tax brackets. Between 1965 and 1980, a typical median-income family saw its marginal income tax rate double (from 22% to 43%) while a family with twice the median income saw its tax rate jump from 38% to 54%.

Just a few years after Ronald Reagan became President, inflation had all but disappeared, dropping to less than 4% in each year from 1982 through 1985. And policies since then have solidified that anti-inflation achievement. As a result, inflation is hardly an issue in this campaign.

And thanks to the tax reforms of 1981 and 1986, families near the median income face marginal income tax rates of only 15% and no one has a tax rate over 33%.

Remember stagflation? That’s a word not heard often now. But those of us over 30 remember years of inflation with slow growth and high unemployment. Despite the slow pace of the current recovery, the unemployment rate has actually been lower on average under George Bush and Dan Quayle than it was in the last Democratic Administration.

The painful effects of the recession are frustrating to everyone. Frustration encourages a desire for change, even radical change. But change will not solve the problem of inadequate investment in the kinds of machinery and equipment that raise productivity and real incomes or in the new businesses that create jobs and opportunities.

Change may bring back inflation, higher taxes and slower productivity growth. For those who want to see the economy improve, it is important to think about the achievements of the last 12 years and to weigh the risk of backsliding against the seductive promise of change.