Just after Ronald Reagan won the presidential election in November 1980, economic adviser David Stockman wrote a memo warning the president-elect that he faced an "Economic Dunkirk" thanks to the disastrous economy he was inheriting.
Among Stockman's warnings was that the Carter administration had set a "Ticking regulatory time bomb" that would blow up the economy.
"Carter gave Reagan the phenomenal gift of deregulation. Combined with the tax cuts that largely took effect in 1983, the economy went on a growth tear," wrote Brian Domitrovic, a scholar at the Laffer Center, in Forbes.
"All the capital that Reagan freed up via his tax cuts found room to roam in the deregulated world which Carter had set up." Reagan continued Carter's deregulatory push and for more than a decade the economy prospered like never before.
To quote Stockman, if these time bombs aren't immediately diffused by the next administration, they will "Sweep through the industrial economy with near gale force, pre-empting multi-billions in investment capital, driving up operating costs, and siphoning off management and technical personnel in an incredible morass of new controls and compliance." The problem is that getting rid of regulations - no matter how disastrous they are - can be a time-consuming process.
In his 1980 memo, Stockman said avoiding an economic Dunkirk required "An initial administration economic program that is so bold, sweeping, and sustained that it totally dominates the Washington agenda holds promise of propelling the economy into vigorous expansion and the financial markets into a bullish psychology." Reagan delivered.
While there is hope for such a comprehensive program under the return of Donald Trump, if Biden wins in November there will be no rescuing the economy this time.
https://issuesinsights.com/2024/04/18/joe-bidens-economic-dunkirk/
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