Ronald Reagan vs. John Maynard Keynes

Much of President Reagan’s economic policy was directed at undoing New Deal policies which were leftover from the Great Depression. These policies were fifty years old by the time Reagan was in office, and he thought that they needed to be updated, revised, or replaced.

Reagan was elected in 1980 and took office in 1981. In a 1986 comment in the Wall Street Journal, he noted that Keynesian economics were “a legacy from a period when I was back in college studying economics.”

Indeed, Keynesian theories began making an appearance with early publications like Indian Currency and Finance, published by Keynes in 1913. His major publications came later, like The Economic Consequences of Peace in 1919, A Tract on Monetary Reform in 1923, The Economic Consequences of Mr. Churchill in 1925, and his large systematic explication in the Treatise on Money in 1930.

Keynesian views were widely understood by the time Ronald Reagan graduated from college in 1932.

Many historians see the influence of Keynes in FDR’s “New Deal” policies, policies which were designed to heal the damage done by the Great Depression, but which instead caused the Depression to last longer and do deeper harm to the economy.

By the time Ronald Reagan became president, many voters believed that it was time to discard Keynesian economics and find other, more credible, economic policy systems.