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proposed by President Kennedy in 1962, but it faced fierce resistance from conservatives and liberals alike. The tax cut was finally pushed through by President Johnson after Kennedy's assassination.

The lift to the economy was ecstatic. Employment rose, the economy expanded, and tax receipts increased by 6.9%, adjusted for inflation, during the five-year Johnson presidency, compared to 2.4% for the entire eight-year Eisenhower term. About the only thing that went down was productivity per worker.

Chalk one up for the supply-side theorists.

The next major tax cut became known as the Reagan Tax Cut. Moving to fulfill his campaign promise to rescue a stagnant economy that was also beset by double-digit inflation President Reagan's proposed a 30% cut. Congress balked, and he settled for a 25% cut. The bill passed congress in July of 1981. Reagan promised some results by the end of the year. The top tax rate dropped from 70% to 50% that year, to 38.5% in 1987, and to 28% in 1988.

Reagan's promised results did not materialize, and in the fall of the year following the initial tax cut, 1982, the economy entered its worst recession since the Great Depression. Unemployment surpassed 10%, bankruptcies soared, as did farm foreclosures, and the trade deficit began to spiral out of control. Starting at under $20 billion in 1981, the deficit climbed steadily to over $150 in 1987. The national debt would balloon from approximately $1 trillion to $2.6 trillion during Reagan's presidency.

It wasn't until the spring of 1983 that the economy would start to expand again.

Other forces affected the economy during that period. The Federal Reserve had tightened the money supply to combat inflation. This had triggered the aforementioned recession. In 1982 came TEFRA (the Tax Equity and Fiscal Responsibility Act) which raised the federal unemployment tax and instituted or jacked up a variety of hidden taxes that hit air travelers, cigarette smokers and telephone callers. It also raised federal unemployment taxes. The oil crisis, which began in 1973 with the quadrupling of oil prices followed by dizzying increases in ensuing years, began to moderate. In 1981 the price of oil began to decline providing relief to the economy. Government spending shot upwards from $590 billion in 1980 to $745 billion in 1982. The initial tax cuts alone cannot be credited with eventually turning the economy around. They were largely negated by the TEFRA tax increases by the time improvements appeared. Nevertheless

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