Monday, June 15, 2009

The Reagan Legacy

I was amused to watch the unveiling of Ronald Reagan's statue in the Capitol Rotunda.
Republicans, in particular, were almost worshipful of President Reagan
I thought that was a perfect illustration of where the Republican party is now.
Reagan changed politics in America in fundamental ways, none of them good.
He brought the concept that tax cuts by them selves were good into the public stage and Republicans have embraced that idiocy ever since. Tax Cuts unmatched by spending cuts DO NOT stimulate the economy long term. They have a clear short term stimulative affect, the same as increasing domestic spending (President Obama's stimulus package is a clear example). The problem with tax cuts it they tend to be permanent while spending increases tend to be temporary.
Shrub got a supposedly temporary tax cut passed and then immediately started campaigning to make it permanent. Those tax cuts never paid for themselves. Reagan's tax cuts never paid for them selves. At least Reagan (and Bush 41) acknowledged that and put forward huge tax increases to keep the budget from going completely out of control. Shrub never got the idea that huge deficits are fundamentally bad for the economy long term.
President Reagan famously said that government wasn't the solution, it was the problem. Another idiocy that has been enthusiastically embraced by the Republican party. That led to deregulating the S&L industry and the resulting S&L bailout. That led to the breakdown of barriers between commercial and investment banks and was a major contributor to the current near depression. Regulation is neither inherently good or bad. Its a tool. History has repeatedly demonstrated that unconstrained capitalism is destructive of society, the cycles of boom and bust hurt far more than they help. But, following Reagan, Republicans still believe in this silly mantra of deregulate, deregulate, deregulate. Without thought or balance, just deregulate.
President Reagan gave us Star Wars, a hole into which we have dumped hundreds of billions of wasted dollars that might succeed in protecting us from North Korea or Iran, but would be utterly useless in protecting us from a nation with more than 10 or 15 weapons. And would be completely useless in protecting us from the stolen nuc smuggled into this country in a shipping container.
And that doesn't even get into Iran-Contra
I know Republicans (and some Democrats) worship at Reagan's feet.
But its time to stop
Time for a rational reexamination of the Reagan legacy for the disaster it was.
I do not believe that History will be kind to Reagan
Nor should it be.

14 comments:

Anonymous said...

WE have a permanent tax cut here in California aptly named "proposition 13". Our credit rating is so low Wall Street laughs at the idea of a new bond issue. Still the Republicans continue to refuse tax increases.

Uncle Walt said...

I suspect they are actually calling for tax cuts.
Prop 13 has been a long term disaster for California. The initiative system there is badly broken and a major reason they are in the state they are in now.

Matty said...

At this point in the Obama Admin's leadership, I think your strawman attack on Reagan is silly and projectionist. The level of incompetence disregard of the laws (some that he played a part in passing) displayed in 4 months of Obama and the current congress exceed nearly all full term presidents.

At a certain point you may just want to cut your losses and jump ship on your messiah.

Uncle Walt said...

What strawman?
The Reagan Presidency left this country a disastorous legacy.
From creating this mythology that tax cuts are always the answer to the silly belief that government regulation is inherently bad to ignoring long term reality and stopping the scheduled increase in fuel efficiency standards.
Where is the strawman in that.
Until the Republican party acknowledges the utter insanity of President Reagan's policies, they will continue to push policies that are untimately destructive of this country.
No Strawman
Just hugely flawed policies based on beliefs, not on facts.

Matty said...

The strawman is that there is anyone of consequence that advocates always cutting taxes without constraining the budget. Of course the reality of cutting the budget is a different story....

I have said many times that I didn't like the level entitlement spending in recent years but that doesn't discount the fact that leaving $ in the hands of the people is a more efficient use of that money.

I'll take the tax cuts and overspending over tax increases and overspending. The latter leaves us in the same lurch with less in everyone's pockets. That's a fact.

How do you think the big 3 got into their problems in the first place? 2 main issues... the ridiculous demands of the Dem-owned UAW and making cars people didn't want to buy. Mandated fuel efficiency forces them to make cars whether people want them or not.

Uncle Walt said...

"The strawman is that there is anyone of consequence that advocates always cutting taxes without constraining the budget."
When Ronald Reagan ran for President he promised Tax Cuts, he never promised the major spending cuts to balance the tax cuts and he didn't cut spending. His opponent in the Primaries (George Herbert Walker Bush) called his economic plan voodoo economics. Early in the Reagan Presidency, the Director of the Office of Management and Budget commented that Reagan's tax policies were risky and was "taken to the wood shed" for his honesty.
On the other hand President Clinton proposed and got through Congress a very large tax increase. Republicans uniformly predicted economic ruin if the tax increases passed which they did without a single Republican vote. AND President Clinton reduced Discretionary spending as a percentage of GDP. And then we benefited from the longest and strongest period of growth atleast since WWII.
President Obama is proposing tax increases on the wealthiest of Americans and is making strides to reduce unnecessary spending.
So there are some of our leaders who propose tax increases.
The concept that "I'll take the tax cuts and overspending over tax increases and overspending. The latter leaves us in the same lurch with less in everyone's pockets. That's a fact." is the essential disaster in the Reagan legacy.
The huge budget deficits that result from "tax cuts and overspending" have a short term stimulative affect and are a long term drain on the economy, raising real interest rates, clogging the credit markets, and making us vulnerable to the demands of our creditors (like the Chinese).
Your preference for tax cuts in all cases is a stunning example of the disastorous failure of Reagan's policies.
We, as a nation, cannot afford the insanity of Reagan's policies and the sooner we recognize that the better off we will be.

Uncle Walt said...

Its interesting that instead of trying to address the disasters in the Reagan legacy, you choose instead to attack President Obama.
I am more than willing to debate the successes and failures of this new administration.
But that wasn't the point of the thread.
Wanna talk about Reagan?

Matty said...

That's a fair enough point... I was making a comparison between tax cuts with massive deficits and tax increases with greater deficits. I still prefer the former.

The difference between you and I is that I think it's generally a good thing that the government takes in less money. That said, your criticisms of deficit spending in general are valid in my mind.

Weird though - now that it's your man in White House its considered inappropriate to make the reference. It seems only months ago that any topic could be turned to Bush hatred.... oh wait, it was only a few months ago.

I will have to defer to your greater knowledge of events that occurred when I was 5...

Uncle Walt said...

"That's a fair enough point... I was making a comparison between tax cuts with massive deficits and tax increases with greater deficits. I still prefer the former."
And to me, there in lies the problem.
You prefer paying less taxes now so that your children and grandchildren can be saddled with your debts.
This concept that, without reference to reductions in spending, tax cuts are always an inherently good thing is fiscal lunacy.
I am horrified that my generation bought so thoroughly into the idiocy of the Reagan years. The current economic mess is a direct result of this concept.
And, despite that your generation and Campbell's will have to pay for our mess, you still think its a good idea.
As to your point about my Bush bashing. I just went back and reviewed all my posts. Some of them were critical of our former President. I have never been shy about my feeling that his Presidency was utterly disastorous for this country.
But I have tried to keep discussions on target. And this thread wasn't about Bush or Obama
I am clearly willing to discuss President Obama's positions, not all of which I am happy with.
But this thread was about something different.
And instead of addressing the points in my post, you chose to open up with an attack on the Obama Presidency.
If you want to take "The level of incompetence disregard of the laws (some that he played a part in passing) displayed in 4 months of Obama and the current congress exceed nearly all full term presidents." and expand it into something to discuss, then do so.
I promise to respond on point.
I went back and looked. I actually don't mention President Bush much. And I didn't find any thread where I went off the topic of the thread just so I could attack him.
I am more than willing to bash Bush. Its easy and fun.
But I try to stay on topic on these threads. Its not weird for you to criticize President Obama. I expect you to. As long as it on topic for the thread.

Matty said...

You spent an awful lot of words ignoring my point.

You presented a perspective on tax policy, hanging on it the as a label the President who was in office. I eventually countered with another perspective, also using the name of the President who is presiding over this policy.

You say that I'm ok with letting my grandchildren pay for Reaganite tax policy and I still ask how that is different than having them pay for our current even more disastrous overspending?

The answer is that with Reagan at least we had the money in our own pockets to create wealth and pass it on to future generations.

I concede that I went off point regarding your man's myriad other failings but since it's mostly just the 2 of us talking, I didn't figure I needed a reservation. Consider me rebuked.

As to Bosh hatred, I'll have to peruse previous posts and comments... My memory's not what it used to be.

Uncle Walt said...

"You say that I'm ok with letting my grandchildren pay for Reaganite tax policy and I still ask how that is different than having them pay for our current even more disastrous overspending?"
Because I am not OK with your kids and grandkids having to pay for the feckless policies that came to be dogma for Republicans during the Reagan Presidency.
President Obama has proposed raising taxes to pay for the new programs he is proposing. President Obama has also identified spending reductions in non-defense discretionary spending as a start back towards fiscal sanity.
The spending that President Obama has proposed that isn't matched by a proposed tax cut is a stimulus package of temporary spending increases. Republican presidents since Reagan have been comfortable calling for spending increases that were not matches by off-setting spending cuts or increased taxes.
You are a poster child for the insanity of Reagan's policies. Blithely accepting tax cuts that we cannot, as a nation, affort, because it puts more money in your pocket for a while and acting like the burden we are laying on your kids is nothing to worry about.
Tax cuts unmatched by spending cuts provide some limited short term stimulus, which you clearly like, at the expense of long term debt that drives up intereest rates and adds Billions/year to the cost of servicing the National debt, money that could much more effectively be spent elsewhere.
Reagan changed politics in this country. Mostly for the worse.
And his fiscally insane tax policies are only one example of a legacy we will all come to regret

Matty said...

I am at my roots a tax cutter because I am for budget cuts. I am for giving less to the government so that they spend less. Is this so insane?

Politicians on both sides appear to think it is.

Matty said...

Do you mean regrets like the estimates discussed in this article?

http://www.washingtonpost.com/wp-dyn/content/article/2009/03/20/AR2009032001820.html?hpid=topnews

"The result, according to the CBO, would be an ever-expanding national debt that would exceed 82 percent of the overall economy by 2019 -- double last year's level -- and threaten the nation's financial stability."

Uncle Walt said...

"I am at my roots a tax cutter because I am for budget cuts. I am for giving less to the government so that they spend less. Is this so insane?"
Thats called starve the beast and our current deficits and the projected deficits prove it doesn't work.
Republicans, in particular, have proven to be remarkably bad a cutting spending, not just in the Bush years but before that. Democrats under Bill Clinton reduced non-defense discretionary spending as a percentage of GDP.
And I suspect that Democrats under President Obama might do the same thing.
But here is the problem.
Entitlement spending, particularly Medicare is consuming a larger and larger portion of the budget.
Non-defense discretionary spending is only about 10% of the Federal Budget so even a 20% reduction in that spending would have a small effect. The only way to get entitlement spending on Medicare under control is through comprehensive health care reform (see my other post) and focus on reigning in the health care bill in this country. If we don't do that, then the MEdicare spending will consume the federal budget. If we can get health care spending under control, then the out year deficits can actually be brought down.
So starve the beast might be emotionally satisfying as a concept, but in reality it is just as much of a fantasy as tax cuts paying for themselves. (One of the really big lies that Reagan told).