The Growth Experiment: How the New Tax Policy Is Transforming the U.S. Economy

The Growth Experiment: How the New Tax Policy Is Transforming the U.S. Economy

The Growth Experiment: How the New Tax Policy Is Transforming the U.S. Economy

The Growth Experiment: How the New Tax Policy Is Transforming the U.S. Economy

Excerpt

"To tax and to please, no more than to love and be wise, is not given to men."

—EDMUND BURKE, 1774

In 1980 the nation was in the grips of the greatest economic crisis it has faced since the Great Depression. The United States had endured a decade of chronic economic disappointment accompanied by a series of acute political shocks, from the defeat in Vietnam to the OPEC oil crises. Not since the Depression had the American economy seemed so fundamentally flawed, or had so many Americans questioned our ability to control our own economic destiny. It was not uncommon to hear economists and political leaders arguing that we were doomed to declining standards of living, that we had entered an Era of Limits, that the new economic order was controlled by OPEC or governed by an ever tightening supply of natural resources.

In January 1980 consumer prices rose 1.4 percent. That month's increase exceeded the average annual rate of inflation during the 1950s and early 1960s. Had that rate continued for the full year, consumer prices would have risen 18.2 percent. Charles Schultze, then chairman of the Council of Economic Advisers, explained to the press that inflation for the year would really be only about 12 percent, but acknowledged that "The Nation has for some time now experienced inflation that would have been unimaginable in earlier days."

Inflation for the year was held down to 12.5 percent, largely because output and employment were declining as well. In the . . .

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.