state of the union

As a contrast to our current President, I'm quoting from Reagan's 1982 State of the Union address. Any emphasis on the text is added by me.

When I visited this chamber last year as a newcomer to Washington, critical of past policies which I believe had failed, I proposed a new spirit of partnership between this Congress and this Administration and between Washington and our state and local governments.

It's my duty to report to you tonight on the progress that we have made in our relations with other nations, on the foundation we've carefully laid for our economic recovery and, finally, on a bold and spirited initiative that I believe can change the face of American government and make it again the servant of the people.


To understand the State of the Union, we must look not only at where we are and where we're going but where we've been. The situation at this time last year was truly ominous.


The last decade has seen a series of recessions. There was a recession in 1970, in 1974, and again in the spring of 1980. Each time, unemployment increased and inflation soon turned up again. We coined the word "stagflation" to describe this.

Government's response to these recessions was to pump up the money supply and increase spending.

In the last six months of 1980, as an example, the money supply increased at the fastest rate in postwar history 13 percent. Inflation remained in double digits and Government spending increased at an annual rate of 17 percent. Interest rates reached a staggering 21 1/2 percent. There were eight million unemployed.


Late in 1981, we sank into the present recession largely because continued high interest rates hurt the auto industry and construction. And there was a drop in productivity and the already high unemployment increased.

This time, however, things are different. We have an economic program in place completely different from the artificial quick-fixes of the past. It calls for a reduction of the rate of increase in Government spending, and already that rate has been cut n early in half. But reduced spending alone isn't enough. We've just implemented the first and smallest phase of a three-year tax-rate reduction designed to stimulate the economy and create jobs.

Already interest rates are down to 15 3/4 percent, but they must still go lower. Inflation is down from 12.4 percent to 8.9, and for the month of December it was running at an annualized rate of 5.2 percent.

If we had not acted as we did, things would be far worse for all Americans than they are today. Inflation, taxes and interest rates would all be higher.

Together, we not only cut the increase in Government spending nearly in half, we brought about the largest tax reductions and the most sweeping changes in our tax structure since the beginning of this century. And because we indexed future taxes to the rate of inflation, we took away Government's built-in profit on inflation and its hidden incentive to grow larger at the expense of American workers.

Together, after 50 years of taking power away from the hands of the people in their states and local communities we have started returning power and resources to them.


Together, we have cut the growth of new Federal regulations nearly in half. In 1981, there were 23,000 fewer pages in the Federal Register, which lists new regulations, than there were in 1980.

Together, we have created an effective Federal strike force to combat waste and fraud in Government. In just six months it has saved the taxpayers more than $2 billion, and it's only getting started.
 
Together, we've begun to mobilize the private sector not to duplicate wasteful and discredited Government programs but to bring thousands of Americans into a volunteer effort to help solve many of America's social problems.

Our current problems are not the product of the recovery program that's only just now getting under way, as some would have you believe; they are the inheritance of decades of tax and tax, and spend and spend.
Because our economic problems are deeply rooted and will not respond to quick political fixes, we must stick to our carefully integrated plan for recovery. And that plan is based on four common-sense fundamentals: continued reduction of the growth in Federal spending, preserving the individual and business tax deductions that will stimulate saving and investment, removing unnecessary Federal regulations to spark productivity and maintaining a healthy dollar and a stable monetary policy, the latter a responsibility of the Federal Reserve System.
 
The only alternative being offered to this economic program is a return to the policies that gave us a trillion-dollar debt, runaway inflation, runaway interest rates and unemployment.