Legacy: Tax cuts, end of U.S.S.R.

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Ronald Reagan changed American politics by making conservatism and tax-cutting, free-market economics popular with middle-class voters, and ending the Cold War by defeating the "Evil Empire" with a muscular military that resonates throughout defense policy today, former advisers and aides to the 40th president said yesterday.

With his declaration of "Government is not the solution, it's the problem," President Reagan took office in 1981 and immediately pursued the underpinnings of his long-held conservative beliefs: lowering taxes, curtailing government regulation over the economy and attacking government waste and fraud.

"Reagan changed that to a debate over how much of what the American people earn would they be allowed to keep," said Gary Bauer, Mr. Reagan's domestic-policy adviser in the White House, said yesterday.

"He argued if people are allowed to keep what they earn, you will get the revenues from economic growth that will keep the government running and that democratic capitalism ought to produce."

The result of his conservative economic theory called "supply-side economics," a belief that tax cuts would stimulate the economy, has been an enduring success and continues to be at the center of American politics today through the tax cuts that President Bush has enacted.

"By every measure -- the size of the economy, stock averages -- the period since 1981 till now has been one of unprecedented growth, with minor setbacks," said Donald P. Hodel, Mr. Reagan's energy secretary from 1981 to 1985 and his interior secretary from 1985 to 1989.

But, Mr. Hodel said, Mr. Reagan's greatest accomplishment was "his determination to call the Soviet Union an 'Evil Empire' over the almost unanimous opposition from his official advisers -- his speechwriters loved it -- and to say, 'Mr. Gorbachev, tear down this wall.'"

Some historians believe that Moscow's attempt to keep pace with Mr. Reagan's trillion-dollar arms buildup, including the never-completed "Star Wars" Strategic Defense Initiative, was a big factor in the communist superpower's ultimate collapse, which occurred after Mr. Reagan had left office.

Most conservatives who worked for him or who supported his aim not just to hold the line on communist expansion, but to roll it back, believed the actual demise of Soviet communism would come so quickly as it did, and without a shot being fired by either superpower at the time.

"If you worked for him, there was no doubt from Day One that he wanted to bring down Soviet communism on his watch," said Mr. Bauer.