Busting the Reagan Myth about Tax Cuts & Increases
“Reagan Proved Deficits Don’t Matter”
– VP Dick Cheney to Treasury Secretary Paul O’Neill in 2002
Big Ingy, in my previous blog post on the rise of a liberal movement to primary Obama was being coy about the nature of tax increases under Reagan. Actually, coy is a nice word. He was being lazy and didn’t want to pony up any real facts. So being the inquisitive blogger that I am, had to do his homework for him.
Well, now I know why he and every other right winger doesn’t want to talk about the actual Reagan record. Ronnie raised taxes by signing into law $132.7 billion worth of tax increases. During the same period he also cut taxes by signing legislation worth $275.3 billion, for a net decrease of $142.6 billion dollars. But, coupled with his deficit spending, the national debt soared $1.873 trillion during his reign of trickle down economic terror, a tripling of the debt.
The obvious conclusion is that tax cuts don’t prevent deficits (as if we need to be reminded of that after Bush the Second’s raiding of the public coffers for tax breaks for the rich), and grossly inflate the national debt. Trickle down does not work.
Reagan’s Budget Director, David Stockman called trickle down, supply side economics a “trojan horse:”
“Do you realize the greed that came to the forefront?’ Stockman asked with wonder. ‘The hogs were really feeding. The greed level, the level of opportunism, just got out of control.”
Greedy hogs indeed!
Furthermore, unemployment went from 7.6% to 5.5% (with a peak of 9.7% inbetween, higher than anything under Obama) in Reagan’s eight years.
My question to conservatives is this: if you are willing to let a republican president triple the national debt to gain 2.1% points of employment, why not let a democrat do it?
Well, the answer is easy: hypocrisy and politics. Compassionate conservatism is dead.
It is clear that republicans are using economic terrorism to hold the unemployed as a hostage in order to aggregate political power in the next election, and collect the tithes of their overlords. Conservative economist and neomonetarist Scott Sumner called these sorts of political actions “treason”.
Reagan Tax Increases, Billions of Dollars (all eleven of them)
Tax Equity and Fiscal Responsibility Act of 1982: +57.3
Highway Revenue Act of 1982: +4.9
Social Security Amendments of 1983: +24.6
Railroad Retirement Revenue Act of 1983: +1.2
Deficit Reduction Act of 1984: +25.4
Consolidated Omnibus Budget Reconciliation Act of 1985: +2.9
Omnibus Budget Reconciliation Act of 1985: +2.4
Superfund Amendments and Reauthorization Act of 1986: +0.6
Continuing Resolution for 1987: +2.8
Omnibus Budget Reconciliation Act of 1987: +8.6
Continuing Resolution for 1988: +2.0
Total cumulative tax increases: +$132.7 billion dollars
To put it in perspective, Reagan also signed into law tax cuts of $275.3 billion dollars. But he allowed spending to increase enough through deficit spending to triple the national debt, a $1.873 trillion dollar increase, or 250%! He increased the debt to GDP ratio from 32.5% to 53.1%, an over 20% increase!