Today is Ronald Reagan's birthday. I believe he would be taken aback if he were alive to witness what is taking place within the Republican party today. Assuming Senator John McCain wins the GOP nomination, it will show how the party has been ideologically transformed since President Reagan so adroitly communicated the conservative core values which defined the Republican party in the 1980's. Reagan united all Americans with his charisma and his ability to communicate the necessity of fiscal conservatism, strong national defense, and strong social values for the betterment of the country. He was an optimist who believed in the strength of the American people and united his GOP base along with "Reagan Democrats" to win landslide elections in 1980 and 1984. The catchphrase of this election seems to be “change,” communicated as often by Republicans as Democrat candidates. According to Democrats, everything is bad, everything is going wrong, and massive changes must be made to "save" the country. Democrat candidate Hillary Clinton promises huge, expensive government welfare programs if elected. Barack Obama, the Democrat senator with the most liberal voting record - more liberal than Clinton or Ted Kennedy - would also favor huge government intervention into the lives of all Americans yet gives no details on any of his policy recommendations for "change". He compares himself to former president John Kennedy, yet his identity seems to be based solely on rhetoric rather than substance. Is the country ready for 21st-century-style socialism? Or is there an alternative which will inspire Americans as Ronald Reagan's policies once did?

It is surprising that a candidate has emerged as the frontrunner in the race for the GOP nomination despite the fact that he is opposed by a majority of his party and has taken many positions in the past which are contradictory to the views of fiscal conservatives, economic conservatives, and social conservatives. John McCain's views on illegal aliens, Bush's tax cuts, oil exploration in the Arctic National Wildlife Refuge, climate change regulation, drug re-importation from Canada, and campaign-finance legislation have infuriated most conservatives, yet he has emerged, nevertheless, as the candidate who will most likely carry the banner for the Republican party in this year's presidential election. How can this be?

The GOP seems to have lost its way during the current primary season. Republicans seem to have lost the optimism of Ronald Reagan and echo the Democrats in their belief that the policies of the country must be drastically altered. Possible conservative candidates such as George Allen, Fred Thompson, and Duncan Hunter either never got started or never picked up support from conservatives. Another candidate, Mitt Romney, is distrusted because of his recent conversion to many conservative beliefs and another former Arkansas governor and Christian minister, Mike Huckabee, is a bit too slick for his own good and has too many social liberal policies which he implemented while in office. Thus, McCain has emerged as the probable GOP candidate despite his crabby, over-the-hill, liberal persona and the fact that he has been able to garner barely one-third of the Republican vote in the primaries.

Many conservatives worry that McCain might permanently change the "soul" of the Republican party and cause it to abandon its traditional conservative values. Is there much of a difference between John McCain and the Democrat candidates for president? One has to wonder when McCain declares that he is well-suited to reach across the aisle to work with Democrats. He has repeatedly demonstrated this with his record for tag-team legislation, working with Russ Feingold, Ted Kennedy, John Edwards, John Kerry, and other liberal lawmakers. "Reaching across the political aisle" always entails selling out conservative values. McCain, himself, seems not to understand the difference between Republicans and Democrats and makes dumb, self-defeating statements such as, "I have no doubt that Senator Clinton would make a good president." That sounds a lot like an endorsement to me. The so-called "mainstream media" is rooting for McCain right now because, if he is nominated, liberals will be in a win, win, win position. If Clinton wins the presidency, good for liberals. If Obama wins, that's good, too. McCain, ditto. Of course, once McCain gets the Republican nomination all the knives will come out and he will be brutally attacked by most of today's media "supporters".

So, what does all this augur for the GOP? I see little chance that Republicans will defeat Democrats in November. The country will fall under the control of big-government politicians controlling the executive branch and both houses of congress. The Supreme Court will probably see two or three more liberal judges appointed to the court. How many years will this last? Only history will tell. But until another conservative standard bearer comes along, the Republican party will most probably be stranded in the political wasteland. Then, again, events in history can change everything. Did not the defeat of Barry Goldwater set the stage for the election of Ronald Reagan?

A few weeks ago marked the silver anniversary of one of the most pivotal events in American economic and foreign policy history.  It was twenty-five years ago on August 13th that Ronald Reagan signed into law the Kemp/Roth tax cuts, also known as the Economic Recovery Act of 1981 – legislation which helped set in motion the events which shaped the world in which we live today.

The bill reduced American income tax rates by approximately one-third across the board, and unleashed the pent up power of an economy besieged by double digit inflation, double digit interest rates and double digit unemployment.

The result was an economy that grew at phenomenal rates, created tens of millions of jobs, raised personal incomes and more than doubled overall revenues to the US Treasury, (something liberals and most economists said couldn’t happen).  In addition, investment and entrepreneurship blossomed, helping to foster the technology boom that has impacted just about every aspect of our lives.

It was a simple economics lesson that provided demonstrable proof that taxes have a dynamic impact on human behavior.  As Larry Kudlow put it recently, "Economic behavior responds significantly to the incentive power of low tax rates that raise the after-tax return on work, investment and risk taking”.  In other words, people work harder and are more productive when they can keep more of the wealth that they create.

While the economic benefits alone make the Reagan tax cuts worthy of memorializing, the resulting economic growth and strength made it possible to overwhelm the Soviet Union in the Cold War.  The fact that tax revenues dramatically increased made it possible for the US to finance a military buildup that forced the Soviets to spend themselves into oblivion in a vain attempt to keep pace.

The rapid growth in technological innovations made it possible to overwhelm the Soviets with the mere potential of what we could produce and bring to bear militarily.  This, as well as the funding that such technology required, effectively ended the Soviet participation in the arms race, and ultimately the Soviet Union itself.

Gorbachev realized this at the Reykjavik summit in 1987.  The productivity of a newly revitalized US economy gave the Soviets pause when Reagan refused to back off of pushing forward with a missile defense program (SDI) which could negate their strategic missile advantage.

In other words, they were convinced we might be able to pull it off, and they knew that they couldn’t keep up.  Shortly thereafter, their basket-case economy imploded under the weight of defense spending and subsidizing their impoverished satellite-state empire.

Arms cost money, not only to build, but to man and maintain.  This explains why you don’t see too many countries with backward economies sporting aircraft carriers.  The more productive a nation’s economy becomes, the more geopolitical power and influence it will have – not just economically and diplomatically, but also in terms of military potential.

Reagan once said that “an economist is someone who sees something happen in practice and then wonders if it would work in theory”.  By now, it would seem that the “theory” of tax rates having a dynamic and dramatic influence on human behavior would be a little more accepted as having been proven in “practice”.

To this day however, the mainstream media, liberal politicians and assorted economists refuse to acknowledge that lower tax rates are due any credit for the strength of the American economy over the course of the past quarter century.

Reagan understood that in order for the US to effectively compete and ultimately win the Cold War, we had to have a strong and growing economy that could produce superior weapons technology and field a superior military.

The principle is just as true today as it was then.  Economic strength makes military strength possible.  And a quick glance at world events underlines the importance of maintaining that strength.

Next time someone pooh-poohs the effectiveness of tax cuts, just ask them to point to the Soviet Union on any current world map.