Archive

Archive (Thatcher MSS)
Personal and party papers, Cambridge

Economy: MT letter to President Reagan (concern at US deficit) [declassified 2007]

Document type: Declassified documents
Venue: 10 Downing Street
Source: Thatcher MSS
Editorial comments:

Released by the Cabinet Office FOI 246199; a copy is in the Thatcher MSS. Ronald Reagan’s reply has also been released and can be read on this site.

Importance ranking: Key
Word count: 187 words
Themes: MT contacts with Ronald Reagan, Conservatism, Leadership, British relations with the US, Foreign policy (USA), Monetary policy, Public spending & borrowing, Taxation, Economic policy - theory and process

Dear Ron

One of the most important achievements of your Administration has been to restore the U.S. economy to health and to create new jobs, to the benefit of us all. I have a very real fear now that this achievement may be in jeopardy, because of the strains in the financial markets. A weakening of confidence could all too easily threaten economic growth around the world.

I was therefore glad to see the reports that you will be willing to discuss tax increases as one of the means of reducing the budget deficit. I know how very difficult this must be for you: I share completely your view of the damage done by high taxes. But the confidence of America under your determined leadership has been the foundation for so much success, in foreign policy, in defence and in so much else. It would be a tragedy Ð for the world as well as for the United States itself Ð if this great strength were to begin to fail us. The priority now has to be for sound money and sound finance.

With warm regards,

Yours ever,

Margaret