« "We just want Jews to be perfected, as they say" | Main | ADL "strongly condemns" Ann Coulter »

The real legacy of Reaganomics: $9 trillion in debt

While the Republican candidates for president trip all over themselves trying to demonstrate who is more Reaganesque, I think it's worth noting one of the major legacies of the Reagan era: almost $9 trillion dollars in national debt. Before Mr. Reagan took office, our national debt was less than $1 trillion dollars. That's what mindless tax cuts for the rich and no accompanying reduction in spending gets you. So don't listen to Republicans who claim every tax cut is made up for by corresponding economic and revenue growth. If that's the case, why have we had a budget deficit every year a Republican has been president since Nixon took office? Our national debt puts the lie to that noise.

Here's your Friday video fun. A 30-second Reagan campaign clip from the 1984 campaign:



Reagan had a Democratic congress. Clinton had a Republican congress. They are the two defining "great men" in US politics during the first half of my lifetime. I happen to think they were both exceptional presidents. This board is so absurdly partisan. I should have known better than to take the bait from the GloNo board. Lowering taxes raises tax receipts because that money instead goes back into companies which grows the economy and creates jobs, creating a larger tax base, etc. The problem is, you cannot lower taxes but increase spending. That is what happened under Reagan, and it's what has happened under Bush. Republicans try to pass this off as security spending, but 40% of the deficit under Bush has been domestic spending growth. He also cannot blame it on congress because he had a Republican congress for most of his presidency. This is not about fiscal policy, or partisan politics, this goes to a more fundamental problem with people— power corrupts, and regardless of who is in power, most cannot resist the temptation to dip into the cookie jar. Especially if they control both the executive and congressional branches of government.

People need to look past ideology and think about government spending the way they think about (or should think about) their own spending. When things are flying high you pay off debts, you tend to spend more money, and you put more aside for a rainy day. When things get tight, you spend less, and dip into savings, or run up some debt to get back on your feet. Partisans on both sides cannot seem to get past their own ideologically driven positions. These are instruments to be adjusted to incentivize a desired outcome.

On a purely political level, Mondale was a fool. He did run a campaign stating that he intended to raise everyone's taxes. Even when it is the right pill to swallow, it is political suicide to run on that as a campaign position. "Vote for me, I'm going to take more of your money away." The populist spin is "soak the rich". I'm not going to raise *your* taxes, just all those rich guys. With the exception of multi gazillionaires, nobody considers themselves to be rich. "Rich" is a relative term. It means, "Anyone who has more money than I do."

Right now we do not need to be raising taxes, but we do need to be cutting government spending, and we need to peg Social Security to life expectancy. The problem is that cutting spending means fighting against unneeded but entrenched bureaucracies and special interests of all ideological stripes, and as for pegging Social Security to life expectancy, as the baby boomers retire and shift to a fixed income, their population bubble is becoming a two-issue voting block: give me entitlements and lower my taxes, you get my vote, take away my entitlements and raise my taxes, you lose my vote. This is a recipe for disaster... but I digress.

"The state is that great fictitious entity through which everyone attempts to live at the expense of everyone else.”
—Frédéric Bastiat

"This board is so absurdly partisan. I should have known better than to take the bait from the GloNo board."

What's more productive? Arguing with those who agree with you or those who don't? Personally, I love that some conservatives have the balls to post here and argue with us. Yes, POLJUNK has a bias--we tend to lean left on social and some economic issues, but you'd be surprised how varied our individual positions are on personal rights and defense. Go ahead, take the bait. It's goes down easy.

Targeting taxes makes sense to me. The idea that "rich" people (and I agree that term is fluid, but Mike has defined it in other posts for the sake of his argument) will spend less money if their taxed at a higher rate is hilarious. If you still have a billion dollars at the end of the day, you're buying whatever you want.

Clinton raised taxes on the upper brackets and reduced the debt while expanding the middle class.

And what about inheritence taxes? I think we should set a relatively high bar--say, $10 million--that is untaxed and then the rest of it is taxed at a huge rate. I understand the desire to leave something to your children after you've worked hard and I think $10 million is a nice kick start.

Social Security? I am all for means testing. If you have $2 million in the bank, you are ineligible for Social Security. I'll leave it to accountants to map out a system for evaluating wealth, but Social Security should be a safety net, not a retirement plan for all. Yes, that means some people who paid into it will not get anything out. Tough shit, that's the cost of doing business in the greatest country in the world. Think of it as a patriotic act and a gift to your community.

Hey ChrisG,

Thanks for your lengthy comments on this topic. Like Phil, I like to see comments from people who disagree with me. Here are a few of my own as a follow up to your comments...

Chris: This board is so absurdly partisan.

I prefer rabidly partisan. :-) It's not even that I'm staunchly Democratic, I'm just so anti-Republican. Personally, there's nothing about the modern Republican party I like. It's like a cancer as far as I'm concerned, and each Republican administration is worse than the last. I won't pretend to speak for my fellow POLJUNK posters, though.

And what would you expect from a political blog? :-) If we weren't passionate about these issues - and passion requires taking sides - we'd be blogging about quilts or something.

Chris: Lowering taxes raises tax receipts because that money instead goes back into companies which grows the economy and creates jobs, creating a larger tax base, etc.

With respect, that simply isn't true, and there is no data to back up that claim. Not even the original Reagan supply siders believed it. They expected tax receipts to go down when taxes were cut, which they did, but believed it would be better for the economy in the long term. It hasn't been. Otherwise, we'd have seen more than just the 4 years of budget surpluses we saw in the Clinton years, and we wouldn't see the great disparity between rich and poor that we see today - greater than anything we've seen since the Great Depression.

I'll agree that federal spending needs to be reduced - I've never suggested otherwise. But the simple fact is that with each successive war since the Civil War, federal expenditures have gone up, and they've never gone down post-war. This country is immense, in terms of its physical size, population, and its global reach. A robust federal government is absolutely essential, unless you don't like highways, clean air, clean water, or drugs that don't poison you. We could also retreat from the world stage entirely, if we really wanted to reduce spending. But that's not going to happen either. So we have to raise taxes on the wealthy and on corporations. People who make $10 million a year shouldn't be paying less than 30% of their income in taxes. They should be paying 90%, like they did when Eisenhower was president. And that still leaves them with more income than 99% of the country.

PS - Why do you think Reagan was such a good president? In my book, he was one of the worst.

Post a comment

Get GLONO merch!