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Exclusive look at Human Events from January 1981

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From the Archives Reagan Pledges American Renaissance

Exclusive look at Human Events from January 1981

Ronald Wilson Reagan, the 40th President of the United States, is a man of dedication and vision who, happily, also seems to live under a lucky star. Whether in college, the military, the movies or the Screen Actors Guild, he easily moves to the front of the power curve.

In the political arena, despite a near disastrous defeat at the hands of President Ford in the early GOP primaries of 1976 and another near knock-out by George Bush in the 1980 Iowa primary, he scaled the heights again, capturing the most powerful political office in the world, the American presidency. And as he took his oath of office last week, the omens for the Reagan era – despite the huge problems he faces – still appeared in his favor.

The sun graced the city with unseasonable warmth on his inauguration day, for instance, while a half-million people from across the nation gathered at the West Front of the Capitol to watch the President’s swearing-in ceremony. It was estimated to be the largest crowd ever to attend such an event.

The speech itself was a 15-minute inspirational gem that suggested no backdown in his programs and goals. A rousing parade followed, complete with floats, a sheriff’s posse, 8,000 marchers and musicians, 450 equestrian teams and 25 sled dogs. The President, who witnessed the parade from a reviewing stand in front of the White House, jumped to his feet each time a military unity passed by, clasping his hand to his heart. When the 300-member Mormon Tabernacle Choir sang at the finale, the President fought back tears.

Yet the best news, of course, and the kind that hinted that the gods were still in his corner, was the freeing of the hostages, and although the terms hardly squared with the claims that the Carter Administration had restored this nation’s honor, their release had a tonic effect on the crowd and freed the Reagan presidency of having to use its major energies to deal with what had become the Carter Administration’s most intractable problem.

It was remarked that their release was a gift from President Carter, which it was, in a way, but it was also a gift from Reagan to himself, since Reagan’s own tough stance on the hostage issue had almost certainly caused the mullahs in Iran to feel they had better make a quick deal with the outgoing Administration. The joke going around the Capitol was: "What’s flat and glows?" The answer: "Iran on Inauguration Day." The joke was apparently not lost on the Iranians.

The day was one of rejoicing in the Nation’s Capital, but would it really bring the "new beginning" that President Reagan promised? That, of course, could not be answered right away, but Reagan’s masterful inaugural address – which he is said to have mostly written himself – clearly indicated that he is determined to bring about a vast change.

Poetic and patriotic, and delivered with a quiet determination, the Reagan speech sparkled with optimism, insisting we could meet our challenges at both home and abroad. In contrast to the Carter years that produced the twin themes of shared scarcity and an impotent America, Reagan sought to rekindle the "can do" American spirit.

"We are too great a nation to limit ourselves to small dreams," he stressed. "We are not, as some would have us believe, doomed to an inevitable decline. I do not believe in a fate that will fall on us no matter what we do. I do believe in a fate that will fall on us if we do nothing."

What is required, he contended, was the kind of patriotism exemplified by such heroes as the World War I soldier who had pledged to do "my utmost, as if the issue of the whole struggle depended on me alone." We need "to believe in ourselves and in our capacity to perform great deeds. To believe that, together and with God’s help, we can and will resolve the problems which confront us. And, after all, why shouldn’t we believe that? We are Americans."

While the President touched on foreign policy, pledging a military build-up, loyalty to our friends and a refusal to surrender to our enemies, he dwelt at length on the need to restore our economy. In order to "reawaken this industrial giant," he allowed, government must learn to live within its means and the "punitive tax burden" must be lightened. "And these will be our first priorities, and on these principles there will be no compromise."

With these words, President Reagan strongly indicated he would follow through with his campaign pledges to control the runaway federal budget and implement the Kemp-Roth tax-rate reduction proposal. Why is the implementation of these twin promises so critical? Unless the economy is turned around, unless our nation can become more productive, the average American will not only find his standard of living falling, but the Reagan Administration will be unable to provide the funds needed to rebuild our rapidly deteriorating defenses. And unless we can restore our military strength, the Soviets will have won their global contest for power.

Thus, President Reagan’s hopes are grounded in this imperative: that the Congress must enact massive spending and tax cuts. The new OMB director, David Stockman, made this point last week in his speech before the National Press Club. Bringing the budget into balance, he said, will "unavoidably involve a serious, real reduction in the rate of domestic spending growth over the next five budget years. There will be no increase even for the inflation that occurs during each year in the aggregate for the domestic budget." We will, he stressed, "have to engage in major surgery almost across the board if we expect to have a plan that will jolt the economy and will move forward on a full-throttle basis."

But Stockman, while dismaying some conservatives by ducking the question of the timing and even the scale of the Kemp-Roth plan to be submitted by the Administration, made the point that heavy tax cuts were essential for the economic growth of the nation. The reasoning of many in the Administration was spelled out last year by Dr. Paul Craig Roberts, who has since been named assistant secretary of the treasury for economic policy.

In his testimony before Ways and Means, Roberts argued that lower marginal tax rates would produce the incentives necessary to give the economy a much-needed push. And a more productive economy would, in fact, provide the government with increased treasury revenues, revenues essential to balance the budget and finance defense spending.

"If you do not soon take action to significantly raise the after-tax rewards to production," Roberts contended, "you may find yourself unable to do so. The economy is faced with an enormous burden of transfer payments and entitlements that are rapidly mounting in the future. Under the present tax code, the very presence of these future claims reduces the incentives to work and to invest. Unless you intend to pay off these claims by promoting divisive class redistribution, you must immediately begin efforts to increase the rate of economic growth. Only through a higher rate of growth – producing a larger tax base – can you meet these future claims.

"Thus the success of the Reagan Administration greatly depends on his determination – and the perception the public has of that determination – to push through Congress dramatic spending and tax cuts. Hence, he must not waffle or, worse, renege, on either their timing or their size. The sooner he can get both his reforms into place, the quicker he will be able to resolve this nation’s acute economic and military problems.

There has been talk, of course, that the new Administration will not press as hard for these reforms as was once thought. But President Reagan suggested in his inaugural address last week that he was quite prepared to battle fiercely for his campaign pledges.

And why shouldn’t he? Inauguration day began on an extremely hopefully note. And so long as he fights hard for what he knows needs to be done, there’s absolutely no reason why the famous Reagan "luck" won’t continue to hold.

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