But the biggest fairy tale about Reagan is the most central one: about taxes and spending. It is one thing to sit in a North Vietnamese prison in the early 1970s, dreaming of a California governor who one day will balance the federal budget. It is another to imagine that it actually happened.
When Reagan took office in 1981, federal receipts (taxes) were $517 billion and outlays (spending) were $591 billion, for a deficit of $74 billion. When he left office in 1989, taxes were $999 billion and spending was $1.14 trillion, for a deficit of $141 billion. As a share of the economy, Reagan did cut taxes, from 19.6% to 18.4%, and he cut spending from 22.2% to 21.2%, increasing the deficit from 2.6% to 2.8%. The deficit went as high as an incredible 5% of GDP during his term. As a result, the national debt soared by almost two-thirds. You can fiddle with these numbers -- assuming it takes a year or two for a president's policies to take effect, or taking defense costs out -- and the basic result is the same or worse. Whatever, these numbers hardly constitute a "revolution."
McCain's stagy self-flagellation, on behalf of all Republicans, for betraying the Reagan revolution when they controlled Congress and the White House is entirely misplaced. George W. Bush and the GOP Congress did precisely what Reagan did: They cut taxes, mainly on the well-to-do, but they barely touched spending.
If the GOP is looking around for an icon to worship, it might consider Bill Clinton. He cut spending from 21.4% of GDP to 18.5% -- three times as much as Reagan. True, he raised taxes from 17.6% to 19.8%, but that's still a smaller chunk than when Reagan left office. And he left us with an annual surplus that threatened to eliminate the national debt. What's more, I think he's available.
Saturday, February 9, 2008
The Real Reagan