basic ideas of each document. How are they similar? How are they different?

Ronald Reagan, First Inaugural Address (1981)

Introduction

When Ronald Reagan became president in 1981, many Americans felt the 1970s had been a long nightmare. The prosperity of the 1950s had disappeared, along with the certainties of traditional U.S. values. In addition, the nation's superpower image had been tarnished considerably. President Carter had lost the election not only because of his failures and the country's weaknesses, but also because he had blamed the American people for the conditions in which they lived. Ronald Reagan had a great sense of what people wanted to hear and how people wanted to think about themselves. He believed that telling the American people they were the greatest people on earth would become a self-fulfilling prophecy. This inaugural address set the tone for his administration.

Ronald Reagan gave his first inaugural address after being elected U.S. President on Tuesday, January 20, 1981.  It was a well-written speech that stated President-elect Reagan's vision and mission for his term in office.

Speech

The business of our nation goes forward. These United States are confronted with an economic affliction of great proportions. We suffer from the longest and one of the worst sustained inflations in our national history. It distorts our economic decisions, penalizes thrift, and crushes the struggling young and the fixed-income elderly alike. It threatens to shatter the lives of millions of our people.

Idle industries have cast workers into unemployment, causing human misery and personal indignity. Those who do work are denied a fair return for their labor by a tax system which penalizes successful achievement and keeps us from maintaining full productivity.

But great as our tax burden is, it has not kept pace with public spending. For decades, we have piled deficit upon deficit, mortgaging our future and our children's future for the temporary convenience of the present. To continue this long trend is to guarantee tremendous social, cultural, political, and economic upheavals.

You and I, as individuals, can, by borrowing, live beyond our means, but for only a limited period of time. Why, then, should we think that collectively, as a nation, we are not bound by that same limitation?

We must act today in order to preserve tomorrow. And let there be no misunderstanding -- we are going to begin to act, beginning today.

The economic ills we suffer have come upon us over several decades. They will not go away in days, weeks, or months, but they will go away. They will go away because we, as Americans, have the capacity now, as we have had in the past, to do whatever needs to be done to preserve this last and greatest bastion of freedom.

In this present crisis, government is not the solution to our problem.

From time to time, we have been tempted to believe that society has become too complex to be managed by self-rule, that government by an elite group is superior to government for, by, and of the people. But if no one among us is capable of governing himself, then who among us has the capacity to govern someone else? All of us together, in and out of government, must bear the burden. The solutions we seek must be equitable, with no one group singled out to pay a higher price.

We hear much of special interest groups. Our concern must be for a special interest group that has been too long neglected. It knows no sectional boundaries or ethnic and racial divisions, and it crosses political party lines. It is made up of men and women who raise our food, patrol our streets, man our mines and our factories, teach our children, keep our homes, and heal us when we are sick--professionals, industrialists, shopkeepers, clerks, cabbies, and truckdrivers. They are, in short, "We the people," this breed called Americans.

Well, this administration's objective will be a healthy, vigorous, growing economy that provides equal opportunity for all Americans, with no barriers born of bigotry or discrimination. Putting America back to work means putting all Americans back to work. Ending inflation means freeing all Americans from the terror of runaway living costs. All must share in the productive work of this "new beginning" and all must share in the bounty of a revived economy. With the idealism and fair play which are the core of our system and our strength, we can have a strong and prosperous America at peace with itself and the world.

So, as we begin, let us take inventory. We are a nation that has a government--not the other way around. And this makes us special among the nations of the Earth. Our government has no power except that granted it by the people. It is time to check and reverse the growth of government which shows signs of having grown beyond the consent of the governed.

It is my intention to curb the size and influence of the Federal establishment and to demand recognition of the distinction between the powers granted to the Federal Government and those reserved to the States or to the people. All of us need to be reminded that the Federal Government did not create the States; the States created the Federal Government.

Now, so there will be no misunderstanding, it is not my intention to do away with government. It is, rather, to make it work-work with us, not over us; to stand by our side, not ride on our back. Government can and must provide opportunity, not smother it; foster productivity, not stifle it.

If we look to the answer as to why, for so many years, we achieved so much, prospered as no other people on Earth, it was because here, in this land, we unleashed the energy and individual genius of man to a greater extent than has ever been done before. Freedom and the dignity of the individual have been more available and assured here than in any other place on Earth. The price for this freedom at times has been high, but we have never been unwilling to pay that price.

It is no coincidence that our present troubles parallel and are proportionate to the intervention and intrusion in our lives that result from unnecessary and excessive growth of government. It is time for us to realize that we are too great a nation to limit ourselves to small dreams. We are not, as some would have us believe, loomed to an inevitable decline. I do not believe in a fate that will all on us no matter what we do. I do believe in a fate that will fall on us if we do nothing. So, with all the creative energy at our command, let us begin an era of national renewal. Let us renew our determination, our courage, and our strength. And let us renew; our faith and our hope.

We have every right to dream heroic dreams. Those who say that we are in a time when there are no heroes just don't know where to look. You can see heroes every day going in and out of factory gates. Others, a handful in number, produce enough food to feed all of us and then the world beyond. You meet heroes across a counter--and they are on both sides of that counter. There are entrepreneurs with faith in themselves and faith in an idea who create new jobs, new wealth and opportunity. They are individuals and families whose taxes support the Government and whose voluntary gifts support church, charity, culture, art, and education. Their patriotism is quiet but deep. Their values sustain our national life.

I have used the words "they" and "their" in speaking of these heroes. I could say "you" and "your" because I am addressing the heroes of whom I speak--you, the citizens of this blessed land. Your dreams, your hopes, your goals are going to be the dreams, the hopes, and the goals of this administration, so help me God.

We shall reflect the compassion that is so much a part of your makeup. How can we love our country and not love our countrymen, and loving them, reach out a hand when they fall, heal them when they are sick, and provide opportunities to make them self- sufficient so they will be equal in fact and not just in theory?

Can we solve the problems confronting us? Well, the answer is an unequivocal and emphatic "yes." To paraphrase Winston Churchill, I did not take the oath I have just taken with the intention of presiding over the dissolution of the world's strongest economy.

In the days ahead I will propose removing the roadblocks that have slowed our economy and reduced productivity. Steps will be taken aimed at restoring the balance between the various levels of government. Progress may be slow--measured in inches and feet, not miles--but we will progress. Is it time to reawaken this industrial giant, to get government back within its means, and to lighten our punitive tax burden. And these will be our first priorities, and on these principles, there will be no compromise.

On the eve of our struggle for independence a man who might have been one of the greatest among the Founding Fathers, Dr. Joseph Warren, President of the Massachusetts Congress, said to his fellow Americans, "Our country is in danger, but not to be despaired of.... On you depend the fortunes of America. You are to decide the important questions upon which rests the happiness and the liberty of millions yet unborn. Act worthy of yourselves."

Well, I believe we, the Americans of today, are ready to act worthy of ourselves, ready to do what must be done to ensure happiness and liberty for ourselves, our children and our children's children.

And as we renew ourselves here in our own land, we will be seen as having greater strength throughout the world. We will again be the exemplar of freedom and a beacon of hope for those who do not now have freedom.

To those neighbors and allies who share our freedom, we will strengthen our historic ties and assure them of our support and firm commitment. We will match loyalty with loyalty. We will strive for mutually beneficial relations. We will not use our friendship to impose on their sovereignty, for or own sovereignty is not for sale.

As for the enemies of freedom, those who are potential adversaries, they will be reminded that peace is the highest aspiration of the American people. We will negotiate for it, sacrifice for it; we will not surrender for it--now or ever.

Our forbearance should never be misunderstood. Our reluctance for conflict should not be misjudged as a failure of will. When action is required to preserve our national security, we will act. We will maintain sufficient strength to prevail if need be, knowing that if we do so we have the best chance of never having to use that strength.

Above all, we must realize that no arsenal, or no weapon in the arsenals of the world, is so formidable as the will and moral courage of free men and women. It is a weapon our adversaries in today's world do not have. It is a weapon that we as Americans do have. Let that be understood by those who practice terrorism and prey upon their neighbors.

I am told that tens of thousands of prayer meetings are being held on this day, and for that I am deeply grateful. We are a nation under God, and I believe God intended for us to be free. It would be fitting and good, I think, if on each Inauguration Day in future years it should be declared a day of prayer.

This is the first time in history that this ceremony has been held, as you have been told, on this West Front of the Capitol. Standing here, one faces a magnificent vista, opening up on this city's special beauty and history. At the end of this open mall are those shrines to the giants on whose shoulders we stand.

Directly in front of me, the monument to a monumental man: George Washington, Father of our country. A man of humility who came to greatness reluctantly. He led America out of revolutionary victory into infant nationhood. Off to one side, the stately memorial to Thomas Jefferson. The Declaration of Independence flames with his eloquence.

And then beyond the Reflecting Pool the dignified columns of the Lincoln Memorial. Whoever would understand in his heart the meaning of America will find it in the life of Abraham Lincoln.

Beyond those monuments to heroism is the Potomac River, and on the far shore the sloping hills of Arlington National Cemetery with its row on row of simple white markers bearing crosses or Stars of David. They add up to only a tiny fraction of the price that has been paid for our freedom.

Each one of those markers is a monument to the kinds of hero I spoke of earlier. Their lives ended in places called Belleau Wood, The Argonne, Omaha Beach, Salerno and halfway around the world on Guadalcanal, Tarawa, Pork Chop Hill, the Chosin Reservoir, and in a hundred rice paddies and jungles of a place called Vietnam.

Under one such marker lies a young man--Martin Treptow--who left his job in a small town barber shop in 1917 to go to France with the famed Rainbow Division. There, on the western front, he was killed trying to carry a message between battalions under heavy artillery fire.

We are told that on his body was found a diary. On the flyleaf under the heading, "My Pledge," he had written these words: "America must win this war. Therefore, I will work, I will save, I will sacrifice, I will endure, I will fight cheerfully and do my utmost, as if the issue of the whole struggle depended on me alone."

The crisis we are facing today does not require of us the kind of sacrifice that Martin Treptow and so many thousands of others were called upon to make. It does require, however, our best effort, and our willingness to believe in ourselves and to believe in our capacity to perform great deeds; to believe that together, with God's help, we can and will resolve the problems which now confront us.

And, after all, why shouldn't we believe that? We are Americans. God bless you, and thank you.

Paul Craig Roberts, The Supply-Side Revolution (1984)

Introduction

Economist Paul Craig Roberts was instrumental in developing many of the economic policies of the Reagan administration. From 1981 to 1982, he was assistant secretary of the Treasury for economic policy, and he a major role in the Economic Recovery Tax Act of 1981. Journalist, author, and scholar at many of the nation's top think-tanks and universities, Roberts published his book The Supply-Side Revolution in 1984. In the selection below, he discusses the debate over Keynesian economic theory and the effects of deficit spending.

Supply-side economics provided the political and theoretical foundation for a remarkable number of tax cuts in the United States and other countries during the eighties. Supply-side economics stresses the impact of tax rates on the incentives for people to produce and to use resources efficiently

Excerpt

Prior to February 23, 1977, Republican economic policy focused on balancing the budget by raising taxes and cutting spending, an approach that denied the party a credible economic and political program. The Republicans were not always successful themselves at reducing spending, but if the government was going to spend, they at least wanted to pay for it with cash instead of borrowed money. This put them in conflict with Keynesian economics.

Keynesian theory explained the economy's performance in terms of the level of total spending. A budget deficit adds to total spending and helps keep employment high and the economy running at full capacity. Cutting the deficit, as the Republicans wanted to do, would reduce spending and throw people out of work, thereby lowering national income and raising the unemployment rate. The lower income would produce less tax revenue, and the higher unemployment would require larger budget expenditures for unemployment compensation, food stamps, and other support programs. The budget deficit would thus reappear from a shrunken tax base and higher income-support payments. Patient (and impatient) Democrats, economists, columnists, and editorial writers had explained many times to the obdurate Republicans that cutting the deficit would simply reduce spending on goods and services, drive the economy down, and raise the unemployment rate. Keynesians argued that the way to balance the budget was to run a deficit. Deficit spending would lift the economy, and the government's tax revenues would rise, bringing the budget into balance. Since cutting the deficit was believed to be the surest way to throw people out of work, there were not many Republican economists. When Democrat Alice Rivlin was asked why there were no Republican economists on her "nonpartisan" Congressional Budget Committee staff, she was probably telling the truth when she said she could not find any.

The focus on the deficit had left the Republicans without a competitive political program. They were perceived by the recipients of government benefits as the party always threatening to cut back on government programs such as social security, while the taxpaying part of the electorate saw Republicans as the party that was always threatening to raise taxes in order to pay for the benefits that others were receiving. The party that takes away with both hands competes badly with the party that gives away with both hands, and that simple fact explained the decline of the Republican Party, which had come to be known as the tax collector for Democratic spending programs. . . .

Supply-side economics brought a new perspective to fiscal policy. Instead of stressing the effects on spending, supply-siders showed that tax rates directly affect the supply of goods and services. Lower tax rates mean better incentives to work, to save, to take risks, and to invest. As people respond to the higher after-tax rewards, or greater profitability, incomes rise and the tax base grows, thus feeding back some of the lost revenues to the Treasury. The saving rate also grows, providing more financing for government and private borrowing. Since Keynesian analysis left out such effects, once supply-side economics appeared on the scene the Democrats could no longer claim that government spending stimulated the economy more effectively than tax cuts. Tax cuts were now competitive, and the House Republicans began to make the most of it. . . .

Many people also have the mistaken idea that taxes on personal income have no adverse consequences for business other than reducing the demand for products. They believe that higher tax rates on personal income help business by reducing the federal deficit and lowering interest rates. In actual fact, higher personal tax rates reduce private-sector saving and drive up both the cost of credit and the cost of labor to firms. When the Treasury examined the effects of the Kennedy tax cuts, it was found that the personal saving rate rose. This implies that the saving rate would fall if tax rates rise, and indeed the saving rate declined as bracket creep pushed savers into higher tax brackets.

Higher income tax rates raise labor costs to the firm, thereby undermining the competitiveness of its products at home and abroad. The higher the worker's marginal tax rate, the more expensive it is to the firm to protect wages from being eroded by inflation or to give real wage increases. Since additional income is taxed at the worker's highest bracket, the higher the tax rate, the larger the gross wage necessary to correspond to any net wage.

This does not meant that deficits are good for the economy. But it does mean that the argument that higher taxes are preferable to higher borrowing is at best unproved. The way this unproven argument has been used against the President's efforts to reduce tax rates and improve economic incentives is irresponsible. The key to a successful economy is incentives. Any economic policy that forgets this-even one that reduces deficits-will fail. . . .

We now have many decades of empirical evidence of the effects of disincentives on economic performance, ranging from China and the Soviet Union to the European welfare states. The effects of disincentives clearly thwart the intended results of central planning, government investment programs, and the maintenance of aggregate demand. On the other hand, there is an abundance of evidence of the positive effects of good incentives. Only free people are productive and forward-looking, but they cease to be free when their property rights are sacrificed to interest-group politics. Supply-side economics is the economics of a free society. It will prevail wherever freedom itself prevails.

T. Boone Pickens, "My Case for Reagan" (1984)

Introduction

This document is a general treatment of President Reagan's economic policies as he faced reelection. Addressing a debate that continues today, the author argues that smaller government is better government because it allows free enterprise to flourish. By comparing four years under Reagan with the previous Carter administration, the author attempts to discourage support for Carter's vice-president, Walter Mondale, and his running mate, Geraldine Ferraro, in the impending election.

Pickens founded Mesa Petroleum 1956 with $2,500.  His fortunes rose as a result of Reagan's economic policies, and he became an avowed admirer of Reagan's leadership qualities.

Excerpt

When businessmen consider why they should support President Reagan's reelection, their analysis should come down to two important questions: What has allowed their companies to grow and prosper? What makes business opportunities in America different from those in any other country?

The answer is free enterprise. Our economic system is what keeps Americans employed, clothed, housed, and nourished. That system makes it possible for every American to attain his or her dream of material or spiritual wealth. It truly makes ours the land of opportunity. This year voters will have a clear choice between a President who believes in retaining the maximum amount possible of the nation's wealth in the private sector and a challenger who supports a greater role for government.

More than any other President in the last 30 years, Ronald Reagan understands the importance of free enterprise. He knows that this country's markets should be allowed to operate freely and competitively. That's the philosophy he brought to the White House in 1981, and we've seen how beneficial the results are. Since President Reagan took office, inflation has dropped from nearly 14% to approximately 4%, and the prime rate has fallen from 20% to 13%.

By reducing government intervention, Reagan has injected a new competitive spirit into the marketplace. There is now an atmosphere that encourages business efficiency. For example, merger and acquisition activity, properly undertaken within the constraints of antitrust laws, has allowed companies and even entire industries to restructure and become more efficient and financially sound. Shareholders have reaped the rewards of their investments, and the government has received additional revenues as taxes are paid on those gains.

In contrast, Walter Mondale does not appear to understand what makes America work. His proposals would more heavily tax individuals and corporations, inhibit capital formation, and use government as the primary means to stimulate employment.

The cheapest, most effective way to create jobs is to encourage business growth, not to devise complicated and costly federal programs. Ronald Reagan has proved that. His policies have invigorated the market and put more Americans to work. Economic recovery is the best jobs programs this country has had. A record 107 million people are currently employed, five million more than when the Carter-Mondale Administration left office.

But Reagan has done even more for the average worker than stimulate employment. Through his tax policies, Americans are now taking home more pay. They have more money for their children's education, a new home, retirement, and investments. Some 42 million Americans have invested in shares of publicly owned companies, either directly or through mutual funds, compared with 30 million in 1980.

We've seen tangible evidence that Ronald Reagan's policies are working for America. That's important for everyone in this country. The health of U.S. business is critical to our nation's survival. We do, indeed, have a responsibility to support candidates who understand that principle-a responsibility not just to ourselves but to all citizens.

I am frequently asked by high school and college students how they can attain success from modest beginnings. My answer is simple. Like many business executives, I owe my success to the free enterprise system. I started with a good education, $2,500 in capital, and an opportunity to do something-the sky was the limit, and fortunately the same opportunity still exists.

The American free enterprise spirit is something we will be able to maintain only under a Reagan Administration. While Walter Mondale tells us that his plan for this country is better, we've seen what better means: Mondale's recent speeches have promised increased government intervention in the market and our lives and disincentives in the form of higher taxes.

The ill effects of the Carter-Mondale Administration were far-reaching: double-digit inflation-the worst since 1946-unemployment, skyrocketing interest rates, and a crumbling economy. There is no reason to believe that a Mondale-Ferraro Administration would be any different in philosophy or outcome.

All of us realize the importance of strong leadership. It is the greatest attribute any President can have and should be a prime asset of the nation. Lack of leadership ability is one of my greatest concerns about a Mondale-Ferraro Administration. Mondale has given no indication of having such ability either as Carter's Vice President or on his own. How could a nation possibly trust the affairs of state to a person who could not make a decision as to whether Bert Lance or Charles Manatt would chair his party?

America need not take that chance when it is blessed with an incumbent President who has proven leadership qualities. Ronald Reagan has been able to instill a new sense of pride and confidence in our nation. Gone are the days of Carter-Mondale defeatism and national malaise.

In 1980 the American people realized the disastrous economic brink on which this country teetered. They wanted a change for the better, and they chose a President who accomplished that goal. On November 6, Americans will once again ask themselves if a change is in order. I think the resounding answer will be that they wish to stay the course Reagan has charted. We're no longer on the brink of disaster; both feet are planted firmly on solid ground, and the future looks bright.

I'm supporting President Reagan and Vice President Bush for those reasons, and I unabashedly ask others to support them as well. I make no apology for political participation. At stake in this election is the future of the free enterprise system. A commitment from the business community, not just a check, is required to prevent another give-away-now, pay-later disaster. And that commitment will mean for future Americans a vigorous free market, the opportunity to succeed, and an attainable American Dream.