Today’s Arkansas Democrat Gazette editorial is a lighthearted satire on Reagan deficit spending. It opens with the following quote from Saint Reagan himself:
“Governments don’t reduce deficits by raising taxes on the people; governments reduce deficits by controlling spending and stimulating new wealth.”
Excellent joke – I never thought Paul Greenberg had a sense of humor. Reagan of course never balanced a budget, on the contrary he was responsible for record deficits as high as 6% of GDP, almost tripling the national debt. Neither did he control spending – he presided over a 69% increase in federal spending, much of which went to the military. He raised taxes on the people no fewer than 10 times during his tenure, including a massive tax hike in 1982 in the middle of a recession. No question, Reagan knew what he was talking about. He’s exactly the right person to ask for advice about balancing the federal budget precisely because he never managed to balance his budget, just as in our little Arkansas media world, ADG columnist Bradley Gitz is the right person to lecture Obama on economics precisely because he declared bankruptcy a few years ago. Yes, bankrupt deficit spenders are the fiscal experts of the hour. We need to hear more of their advice!
Oh wait, What are you saying?
It’s not a joke? The editors are dead serious about looking to Ronald Reagan for fiscal advice??? Well that explains a few things.
Which raises the question, the one that I’m sure almost every reader of ADG editorials must have asked themselves, the big famous question as intractable as whether the egg or the chicken came first (please leave a comment if you think you have an answer):
Are Paul Greenberg and his clique really that dumb, or do they think we are that dumb?
For facts, figures and charts on Reagan, go to the Bradley Gitz post.
UPDATE: NYT Article on Reagan’s deficit dreamscape, worth reading
And the Arkansas Times recently ran a long cover story The ruin of Reaganomics by economist David Cay Johnston.
One addition: Whether Reagan stimulated wealth depends on one’s point of view. On the one hand, his hard dollar monetary policy pushed unemployment into the double digits during his first term. But undoubtedly, Reagan’s policies did stimulate wealth concentration. A tiny elite of super-rich Americans enjoyed fantastic wealth accumulation while most of the rest saw their real incomes stagnate. The share of wealth held by the top one percent of the population was about 20% in 1979. It exploded to 32% by 1986 and 36% in 1989. Income also became markedly more concentrated, as economists Thomas Piketty and Emmanuel Saez have documented (see The World Top Incomes Database): the share of the national income of the top one percent increased from 8% (1980) to 13% (1988) thanks to Reaganomics. Could that explain why Reagan is in high demand today? Might it be that ADG’s boss, Walter Hussman, and his right wing
zealots editors don’t care an iota about debt and deficits? Apparently, Reagan’s (and of course GWB’s) deficits were okay because their policies helped the rich get richer. An eye-opening book about wealth concentration in the United States is Hacker and Pierson’s Winner-Take-All Politics: How Washington Made the Rich Richer – and Turned Its Back on the Middle Class.
Here’s a bold prediction: as soon as the next Republican is installed in the White House, the Tea Party and their ADG cheerleaders will stop pretending to worry about debt and deficits. Instead, they’ll revert to quoting Dick Cheney: “Reagan proved that deficits don’t matter.”
UPDATE 2: It is remarkable that the chart about the federal deficit that the ADG regularly uses (e. g. on July 14 and on March 11) inexplicably ends in 2002. Thus readers are not shown the high deficits of the Reagan era and the balancing of the budget under Clinton. The misleading time scale was criticized in a recent letter to the editor but ADG news editors don’t seem to care.
UPDATE 3: In 1980, neoconservative leader Irving Kristol wrote an article entitled “The Battle for Reagan’s Soul” in which he recommended deficit spending. He had this to say about fiscal responsibility (source):
“And what if the traditionalist conservatives are right and a Kemp-Roth tax cut, without corresponding cuts in expenditures, also leaves us with a fiscal problem? The neo-conservative is willing to leave those problems to be coped with by liberal interregnums. He wants to shape the future, and will leave it up to his opponents to tidy up afterwards.”
This is the script that all Republican presidents since Reagan have played by.