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Reagan took the vote as a mandate for an "era of national renewal" that he proposed to achieve by some unfamiliar methods: tax cuts, budget cuts, less regulation, less welfare. But before he could even begin to achieve anything like that, he had to endure the shattering attack by John Hinckley, a reasonably prosperous and reasonably well-educated young man whose only motive for murder was his desire to impress a movie actress whom he had never met, Jodie Foster. It was Reagan's luck that five of the six bullets missed him, but one apparently ricocheted off his car, spun below his armpit and punctured a lung. Reagan did not even know he was wounded until he began tasting his own blood as the armored limousine sped him away from the scene. But he was brave, stoic, uncomplaining. Lying in bed, he even began offering a stream of jokes. To doctors as he entered surgery: "Please tell me you're Republicans." On coming out of anesthesia, he paraphrased W.C. Fields: "All in all, I'd rather be in Philadelphia." And again: "If I had this much attention in Hollywood, I would have stayed."
Long after Reagan was restored to health, the effects of the attack lingered. "There was a certain sadness," said one of his old friends, former Senator Paul Laxalt. "You could see it in his eyes. It wasn't just the physical pain. I think that he was deeply hurt, emotionally, that this could happen to him." Reagan was reluctant to admit any such hurt, but he did acknowledge to an interviewer that it had been a "reminder of mortality and the importance of time." Beyond that, he liked to say, "God has a plan for everyone."
Reagan had his own plan. When he asked the voters whether they were better off than they had been four years earlier, he was aiming at a continuing phenomenon known as stagflation, an inflation that had climbed to 13.5% in Carter's last year while the economy remained stagnant. The new Congress gave the new President what he most wanted, a 25% tax cut over three years and a $35 billion cut in the budget. At a time when many economists were arguing that America would just have to learn to live with 10% inflation annually, Reagan reappointed inflation fighter Paul Volcker as chairman of the Federal Reserve and supported his war on inflation despite withering attacks and considerable domestic pain. The economy swooned into a recession: by the following year, the GNP was shrinking at a rate of 1.9%. Unemployment reached 10.8%, the highest since the Depression, and the poverty rate grew faster than it had in decades. By 1983 the annual federal budget deficit had climbed past the $200 billion mark.
Reagan and the supply-side theorists around him were so convinced of the virtues of growth that they were less concerned with getting around to the spending cuts and worrying about deficits. Some congressional leaders and White House aides cooperated in urging Reagan to return to conventional measures, some "revenue enhancements," but the President rejected all evidence of worse troubles ahead. Everything would soon get better, he kept saying. And to the surprise of most professional economists, just about everything did.