Professor Brian Domitrovic has a very impressive article in the Investor’s Business Daily:
New York’s Jack Kemp took the opportunity to reveal economic research that showed that government spending causes people to produce less and thus stood to exacerbate the inflation problem. He also pointed to studies showing that tax cuts shrink the size of the black market.
A minor victory again, perhaps. But the arguments proved so resonant to members that the next year, 1978, Kemp’s own 30% tax cut passed the House twice and the Senate once — this in the same 95th Congress with its Democratic supermajorities. Kemp’s tax cut was not made law only because of the intransigence of the president and the congressional leadership.
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When the electorate in November 1980 charged Ronald Reagan and his large Republican contingent in Congress with solving the horrendous stagflation problem that had been gripping the nation for years, Kemp’s tax cut got passed within a few months.
By the time that tax cut fully phased in, in early 1983, the economy had embarked on what would prove a 25-year run of growth without any inflation trade-off, a quarter-century of unqualified prosperity that remains as epic a chapter as any in the industrial history of nations.
It is inconceivable that the Reagan Revolution would have occurred had the Republicans, in their hour of inconsequence in 1976 and 1977, not begun political and intellectual preparations for what they would do in power once the electoral cycle favored them again.