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178 The year 1981 ushered in a period of conservatism that had no equal since the Hoover era. A seventy-year-old former Hollywood actor, before becoming California governor in 1967, became its prophet and spiritual leader. Unlike his predecessor, Jimmy Carter, President Ronald Reagan exhibited a vision that he skillfully communicated to the American people . He proclaimed that government was not a solution but a cause of our national problems. He intended to reduce the role of the national government domestically while strengthening our national defense. At the same time, he asked for no sacrifices from the American people. Instead, he confidently sought to renew a sense of this country’s greatness in asking Americans to “dream great dreams.” His buoyant optimism contrasted favorably to Carter’s crisis-of-confidence lament as he employed the rhetoric of American exceptionalism in proclaiming this nation’s rendezvous with destiny. Reaganfirstaddressedtheeconomicwoesofdouble-digitinflation,interest rates above 20 percent, and unemployment of more than 7 percent by introducing a tax cut of 25 percent that favored those in the upper-income brackets. Called supply-side economics and preached by Republican candidates in the 1980 campaign, it sought to stimulate investment and hence economic growth that supposedly would result in increased federal revenues and more jobs. Reaganomics also favored an appreciable increase in defense appropriations, which the Soviet Union undoubtedly could not match without crippling its economy, perhaps resulting in its ultimate destruction. In order to curb escalating federal deficits that were inevitable from generous tax cuts, David Stockman, director of the Office Management and Budget, understood that major reductions in Social Security, Medicare, and even defense were imperative. While Reagan toyed Chapter 8 Combating the reagan revolution 179 Combating the reagan revolution with reducing Social Security and Medicare benefits, which constituted 48 percent of the budget, he pragmatically concluded that touching the “third rail” would be impolitic. Instead, he decided to go after the lesser Great Society social programs along with reducing the regulatory powers and other activities of various federal agencies. In some cases, the states would assume some of those responsibilities. As far as defense expenditures were concerned, which already amounted to 25 percent of the budget, Reagan said that “defense is not a budget item. You spend what you need.” The president also rejected Stockman’s advice to curtail tax breaks for corporations such as the oil-depletion allowance. Nevertheless, he had the initial support of the American people who rallied around him, especially after he survived a bullet near his heart by deranged assassin John Hinckley on March 30. Americans read of his wit and courage—punctuated by his comment to his wife, Nancy, “Honey, I forgot to duck.”1 During those first months, congressional Democrats, clearly on the defensive, offered token opposition to Reaganomics. Only eleven Democrats, including Eagleton, opposed the Economic Recovery Tax Act. In fact, some forty-eight southern Democrats, whom Reagan wooed, voted for it. Known as the “boll weevils,” they would soon join the Republican Party. Other Democrats—convinced that their party had become too linked to expanding welfare programs, minority-group demands, and a vacillating foreign policy—now moved to the political center. This included younger Democrats—the neoliberals, including Senators Paul Tsongas of Massachusetts and Gary Hart of Colorado—who sought a reexamination of the role of the national government. They had evolved from the new politics and the antiestablishment impulse of that era. Meanwhile, the party ’s titular leader, Walter Mondale, said precious little in 1981. Refusing to speak critically of the Reagan administration, he indicated that he was engaged in a “reeducation program.” His turning against Reagan’s economic policies would have to await another year.2 What remained was a small group of Democrats to defend the party’s traditional liberal posture. They were led by Senator Ted Kennedy, who continued to sail against the wind by stating that “I will never retreat on any fundamental commitment to old values of fairness, decency, equity and compassion.”3 That group included Tom Eagleton; no one more exposed the fraudulent aspects of supply-side economics, which Reagan suggested would lead to a balanced budget by 1984. Eagleton’s criticism intensified in the fall of 1981 when the economy faced an even worse recession than the Carter years. Unemployment rose to nearly 9 percent. The cause was largely attributed to Federal Reserve Board chair Paul Volcker, who raised interest rates further to curtail the [3.17.128.129] Project MUSE (2024-04-24...

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