If you were born before 1970, the phrase “Morning in America” probably has special meaning to you. As part of President Reagan’s 1984 campaign for his second term, he utilized an advertisement with that same title. “Morning in America” was used both literally (the economy was turning around and people where going to work) and as a metaphor for renewal. We were just starting to recover from the “Carter Years” which included confiscatory federal taxes, a ballooning welfare state, an inept foreign policy and increasing government regulation in almost every part of our personal and business life. Under President Carter, we were also suffering from Stagflation, a combination of extremely high unemployment and extremely high inflation which crippled the economy. The liberal policies under Carter based on Keynesian Economics continued to make the business environment worse and economically we were in a death spiral.
In Reagan’s first term, the administration implemented sweeping economic, regulatory and political reforms. Reagan crushed inflation by reducing the money supply, spurred economic growth by dramatically cutting taxes and eliminating layers of Federal regulations, and stabilized foreign policy with a “peace through strength” approach. After Reagan’s first term, the country was growing and gaining strength.
Fast forward to today, unfortunately the Obama Administration has taken a very similar road as the Carter Administration. In spite of dramatic increases in government spending and increases in the US debt, unemployment remains high and the economy is weak. Recent increases in Federal Regulations (such as Obamacare) have further repressed economic activity and left businesses paralyzed by the uncertainty created by looming additional regulations.
A small glimmer of hope emerged in the Congressional and State elections this Fall. With the capture of the US House of Representatives and most State Legislatures by conservatives, we effectively have gridlock. The likelihood of further regulations and increased taxes has now been dramatically reduced. However the country can’t return to its prior strength through gridlock. As in the past, our path back to robust growth includes dramatic across the board decreases in taxes, reductions and repeal of layers of regulations, and shutting down the Federal Reserve’s printing of money to cover our excessive government spending.
It can be Morning in America again.