Publish Date: Sept. 21, 1981
Cover Story: Making It Work
How TIME Covered the News: When he entered the White House in 1981, Ronald Reagan inherited an economy plagued by stagflation: A double-digit economic contraction combined with double-digit inflation. He immediately enacted policies that supported Reaganomics, or supply-side / trickle-down economics designed to return more money to the wealthiest, who would then help stimulate the economy. After Reagan’s first summer, TIME surveyed the results:
“Why, then, the sudden outburst of postsummer anxiety, even before Reaganomics has a chance to show what it can do? Nearsightedness in a word. And a fear that, in the long run, Reagan cannot deliver what he has promised. Or, put another way, a mix of present pain and future lack of faith. A sizable part of the President’s problem stems from the fact that the most vigorous critics of Reaganomics are focused on the short run: Congressmen worried about re-election next year, brokers buying and selling stocks minute by minute, businessmen who need loans.”