Wednesday, March 16, 2016

The Enduring Delusion...

Rational Nation USA
Purveyor of Truth


Ronald Reagan presided over both a recession and great job growth, and, he told us government was not the solution, that it was the problem. He lifted American's spirits and made us feel good about our nation again after the Iran hostage crises and Jimmy Carter. He said that economic growth created by lower taxes and less regulation would create the rising tide that would lift all boats, and so he oversaw a reduction in top tax rates from 70% to 28%. He raised taxes too during his tenure in the White House, 5 times, yet the federal debt tripled from 994 billion to 2.9 trillion. He talked about reducing the size of government and getting it off the backs of the American people, yet he actually only reduced the growth of government. And, he increased defense spending to levels not seen since WW II.

Since 1980 and the Reagan "conservative" Revolution the GOP has been preaching the same gospel to achieve growth and prosperity, lowering taxes and cutting regulations. From 1989 (after the debt tripled from 1981-1989 under Reagan) to the present the debt has increased from 2.9 trillion to 19.1 trillion, a 659% increase. Largely due to the profligate war spending and the financial collapse during the GWB administration.

As we approach another presidential election year the candidates of the GOP are, to one degree or another, holding fast to the cherish mantra of lowering tax rates, reducing regulatory burdens, increasing defense spending, reducing the size of government, and a whole lot of increased expenditures from building a wall along the southern border to deporting 11 million illegal immigrants. Somehow the numbers just don't add up. Again.

James Surowiecki has a very good article in The New Yorker, following are excerpts from the article.


In 1980, the third-party Presidential candidate John Anderson succinctly summed up Ronald Reagan’s promise to simultaneously cut taxes, increase defense spending, keep government services intact, and balance the budget: “Reagan’s budget is constructed with mirrors.” Sure enough, Reagan presided over eight years of deficits that tripled the national debt. Yet the Republican faith that you can tax-cut your way to deficit reduction has never dimmed. This year’s Republican race is dominated by candidates whose budgetary plans make Reagan’s look downright reasonable.

Not surprisingly, the most extreme plan is Donald Trump’s. He would slash taxes across the board, reducing revenues by nine and a half trillion dollars over the next decade, according to estimates by the nonpartisan Tax Policy Center. Yet he has also promised to balance the budget, protect Social Security and Medicare, and not cut services. How? Well, he says he’ll get rid of “waste and fraud and abuse,” and abolish the Department of Education and the Environmental Protection Agency. And he thinks that the tax cuts would spur an economic boom, so that revenues will actually increase.

This is pure fantasy. Those spending cuts would save just a tiny fraction of what he claims, and the revenue projections have no basis in reality. Yet, unrealistic as Trump’s ideas are, they differ from those of his chief opponents only in degree, not in kind. Marco Rubio wants to couple a $6.8-trillion tax cut with significant increases in defense spending, while Ted Cruz has proposed an $8.6-trillion tax cut with—guess what?—significant increases in defense spending. Naturally, Rubio and Cruz have been vague about where they’d find the necessary trillions in cuts, and about how what the government does would be affected. This is par for the course. Paul Ryan’s infamous budget of 2012 would have effectively eliminated nearly all the federal government’s non-defense discretionary spending, even as he insisted that he wanted to “strengthen” the social safety net and keep the government investing in infrastructure.

The candidates are engaged in a familiar dance. Voters always say that they’re worried about the deficit, but, as Brendan Nyhan, an assistant professor of government at Dartmouth, put it to me, they’re skittish when cuts are specified: “They may have a symbolic preference for cutting spending, but that’s different from their actual preference for spending on programs they like.”...

If you enjoyed the teaser the rest of the article can be found BELOW THE FOLD

9 comments:

  1. A key
    Reagan insider finally saw through the smoke,
    mirrors and teflon posturing.

    ReplyDelete
  2. BB... That was a classic article from Stockman. The entire concept of deficit spending started with the GOP in an attempt to create so much debt, you'd have to starve the safety net to pay it off...

    Stockman was honest, something in short supply these days in the GOP...

    ReplyDelete
  3. A lot of people were sold on the Reagan narrative and bought supply side economics.

    I was a young 29 year old general foreman when Reagan tok office. Struggling with a new mortage and 2 very young children I saw my income an financial picture improve during the Reagan years, substantially. I was sold and became a strong supporter. I'm sure there were many others who have similar stories.

    Today, at soon to be 64, and having much more experience as well as eing beter read, I understand the fallacy of the illusion the GOP created. I hope many more are growing to recognize the truth.

    When I listen to trump, cruz, Kasich, and even HRC the sense I have is that nothing is going to change ontil the devil comes calling for its dues.

    ReplyDelete
  4. Replies
    1. We are still suffering the effects of 8 years of Reagan.

      Delete
  5. It's good for democrats to have a generation or two they can blame everything on Reagan, as if he was and remains the only player. Of course many will be blaming Obama for a generation or so I imagine on the other side. It's easier to cast blame than to fix real problems.

    ReplyDelete
    Replies
    1. Of course we have trump, cruz, and the rest still singing the gospel so who knows. I figure I'll be long gone before anything is resolved.

      Delete
    2. Congrats on turning 64 RN. (I turn 75 next month :( ) As for blaming Obama, that started before he was elected. While Reagan
      had a pliant congress, Obama has been thwarted at every turn:
      throw in a hostile SCOTUS as well. I agree both will be criticized, generally along political lines, but in looking at
      the decline of the middle class, the destruction of trade unions, the growing power of the evangelical movement and the transfer of wealth and power to the 1%, its pretty hard to ignore where it all began.

      Delete
    3. Thanks BB-Idaho. Actually my birthday is the of next month, but I'm staring to celebrate early. ;)

      You're right, it is hard to deny the origins at this point. There exists ample evidence for anyone who wishes to look at it. But there are many, including influential GOP politicians and elected officials, as well as armchair economists and pundits that keep preaching the gospel with no shortage of folks still buying it.

      Delete

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