Threat

Following the 1981-1982 recession, the fits-and-starts that had crippled the American economy throughout the ’70s disappeared. In 1984, the economy expanded by 6.8 percent, the greatest growth in a single year since 1951.1 Thereafter, although at more modest levels, growth was sustained until mid-1990, marking the longest period of peacetime economic expansion in American history. The Reagan administration claimed, and most people agreed, that this long period of steady growth without inflation clearly vindicated their supply-side economic policies.