Well, in the interest of trying to stay well informed, I have committed myself to watching most of the presidential debates. A curiosity in the Republican debates is the constant invocation of a person all the candidates laud profusely: Ronald Reagan (57 times, by actual count in one debate).
Unfortunately, for the party, he is not running! He is ubiquitous in the debate, but I’ve never seen him on the stage.
That does not stop what appears to be a glorious memory of the grand old man — though slightly faded, and often significantly distorted. As an interesting side note, the name of George W. Bush is rarely, if ever, mentioned in these debates by a single candidate. That should give us some pause.
In that speech, he proclaimed: “Government is not the solution to our problem(s). It IS the problem.”
Every GOP candidate proclaiming Reagan gospel
And with that proclamation, every Republican candidate has taken that gospel — pledging to outdo the others in hewing to the Reagan line.
Less government, less taxation, fiscal responsibility, privatization of every activity possible — all with the promise of a better, more vigorous economy, and less government involvement. The only problem is, it did not work quite that way, and pledging fidelity to Ronald Reagan may not be the best route to the White House, once the Reagan years are analyzed.
Even before he was elected, there were critics — and not all liberal ones. George H. W. Bush, in the 1980 election campaign, called Reagan’s programs “voodoo economics.” Interestingly, later when he was president and tried to observe Reagan’s low-tax/no-tax pledge (the famous “read my lips” speech), the inadequacy of voodoo economics came back to spook him out of office.
Reaganomics didn’t work too well for Bush, nor Ronald Reagan either, for that matter.
Well, Reagan did hit the ground running with his program, and he lowered tax rates almost immediately – for some! He cut the TOP personal tax brackets from a high of 70 percent to 28 percent over his eight years in office, but he increased payroll taxes, as well as the effective tax rate, on the lower two categories!
If that is a tax cut, thanks, but no thanks.
Rehashed trickle-down economics
This is just a rehash of “trickle-down” economics, which has a history of dubious success (versus the “rising tide helps all” approach). On balance, the tax cuts never stimulated sufficient new revenues to offset the severe loss of tax revenue in the Reagan years. Nor did the government significantly shrink, despite the lessened revenues, and his election promises. In 1985, federal outlays were 22.9 percent of the Gross Domestic Product — the highest from 1962 to 2002 — smack in the middle of the Reagan presidency.
In 1983, we had a serious recession — but in fairness to Reagan, we did have a decent recovery. However, from that point on, the GDP growth during his tenure averaged 3.4 percent — slightly lower than the annual average 3.6 percent in the post-World War II period. Not bad, but certainly no panacea as the current candidates now attest.
But that was not the worst of it. Reaganomics caused significant trade deficits, and even worse, massive budget deficits, with excessive military spending, not covered by compensating revenues. The United States, under Reagan, moved from a national debt of $700 billion when he first took office to $3 trillion in debt when he was done (remember, that was in 1980s dollars). In a few short years, we had gone from the world’s largest international creditor nation to the world’s largest debtor nation.
So much for the vaunted Reaganomic program. And even Reagan later said this was the greatest disappointment of his presidency.
As a corollary of tax cutting, all the current candidates mouth the mantra of “cutting spending.” In fact, we have heard this in virtually every campaign since Lincoln. The real questions are: what, where, when and how? That specificity seems to elude the promise.
Further, the GOP candidates have railed against those cursed “earmarks,” but in the six years they recently controlled all the levers of government, they actually proliferated.
Reagan was always true to his conservative principles but also had a streak of “disinterest” about him regarding economic affairs. Donald Regan, his secretary of the treasury, and later chief of staff was quoted as saying: “In the four years that I served as secretary of the treasury, I never saw President Reagan alone and never discussed economic philosophy or fiscal or monetary policy one on one. The president never told me what he believed or what he wanted to accomplish in the field of economics.”
A strange ring of familiarity
Does all this have a strange “ring” to it? A new president. One with little economic experience or even interest. A desire to cut taxes — especially on the upper income brackets — with reduced revenues, reduction of services and programs. Then, to maintain a no tax pledge, laying off substantial funding to the states (who are not in very good shape to absorb them). Further, a selective elimination of government social programs, but huge increase in military budgets without compensating income. And serious deficit spending (borrowing to avoid new tax revenue generation).
This all sounds familiar, kind of like what we have now, as our economy seems to be drifting downward, with massive borrowing (from unfriendly countries) going through the roof. A program made up of lots of “smoke and mirrors”. To the Republican candidates, I would caution, “Be careful what you are asking for. You might get it!”
Perhaps the only other word invoked as often as “Reagan” in these debates is the now nauseating word “change” (to me, it now means “change the channel”). The Republican candidates who are now eagerly searching for some kind of traction on “change” are on a bad track with Reaganomics, because, to me, it has the odor of four more years of the past eight years — significantly out of touch with the times, or a history of success.
So, what is this all about?
No, it is not an indictment of the Reagan presidency, which is for historians to analyze in depth. Nor is it intended to be a cogent in-depth discussion of Reagan’s tenure, which is far too complex to discuss here and now. But it is a valid and general critique of Reaganomics, which all of the current GOP candidates are espousing, and the economic issue, which polls show is top of the mind with voters.
On balance, canonized or not, Reaganomics was not such a glorious success — almost certainly far poorer in most respects than, say, the Clinton years with better GDP numbers, greater prosperity, no deficits, and surpluses to boot.
So, we should not blindly follow the candidates as they attempt to take us down the Reagan path. Personally, I would prefer to hear what their own plans are, not those of a past program with decidedly mixed results. In short, I am not sure the country is ready for four more years of Ronald Reagan.
Myles Spicer of Minnetonka has spent his entire business career as a professional writer and owned several successful ad agencies over the past 45 years.
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