WEST LAFAYETTE, Ind. — President Reagan gave Purdue University students a course in "Reaganomics" today, arguing that government regulation of the economy produces failure--not prosperity--while free-market policies achieve success.
In a speech chronicling his economic gains, Reagan did not mention the federal deficit, which swelled to a record $221 billion in fiscal 1986, or the national debt, which has doubled during his presidency, topping $2.2 trillion.
Reagan said some people fear that high technology will destroy more jobs than it creates and consider technology the enemy of job creation.
"It's true that over the years adjustments have had to be made as older industries sometimes gave way to newer," he said. "But these adjustments were made, and today our nation employs some 113 million"--an increase of 13 million over the last 52 months, Reagan said.
Reagan, en route to a 10-day California ranch vacation, stopped to tour Purdue University's School of Technology to address students and to see a demonstration of robotics and computer-aided manufacturing techniques.
Reagan said the students should consider what policies best foster economic creativity and technological advance.
The 1970s were guided by the Keynesian notion "that government could manage the economy by raising or lowering the level of demand," Reagan said. "In particular, it was thought government could stimulate economic growth by inducing greater consumption and demand."
However, he argued, the policy lost sight of the individual and focused, instead, on government. Regulation of the economy increased, he added, and government spending soared.
'Standard . . . in Decline'
By the 1980s, Reagan said, "interest rates had reached the highest levels since the Civil War. And the standard of living was actually in decline.
"Government had had its chance. There is only one word for what it produced: failure," Reagan said.
The President said his Administration took a different approach, beginning in 1981.
With tax cuts, cutbacks in federal regulation and a slowdown in the growth of federal spending, "the results have been profound," Reagan boasted.
"Last year, inflation--just six years ago the public's No. 1 concern--reached the lowest point in 20 years. Real income is up. In the last 4 1/2 years, the stock market has nearly tripled," he said.
"So, what the economic policy of the past six years has achieved can be stated in one single word: success," Reagan said.