Reagan Was A Great Liberal

[LurkerNoMore]

I see the arrows in his knee are getting in the way of him typing out a logical reply that is relevant to his claims.

HAHAHAHAHA

[syntaxmachine]

After President George W. Bush sent Congress an outline of his tax reform plan on February 8, some critics immediately began to attack it as a return to what they portray as the fiscally irresponsible policies of the Reagan Administration. According to these commentators, Congress should scale back--if not outright reject--President Bush's tax reform proposals because they are based on a period when the wealthy received excessive tax cuts and revenue was wasted on defense even though most Americans struggled in poverty. This is a revisionist view of recent history that ignores reality and denies the fact that President Reagan's sound policies and determination deserve much of the credit for the current economic picture. Congress should embrace President Bush's tax reform plan as a responsible return to the most successful economic policy of the 20th century.

President Ronald Reagan's record includes sweeping economic reforms and deep across-the-board tax cuts, market deregulation, and sound monetary policies to contain inflation. His policies resulted in the largest peacetime economic boom in American history and nearly 35 million more jobs. As the Joint Economic Committee reported in April 2000:2

    In 1981, newly elected President Ronald Reagan refocused fiscal policy on the long run. He proposed, and Congress passed, sharp cuts in marginal tax rates. The cuts increased incentives to work and stimulated growth. These were funda-mental policy changes that provided the foundation for the Great Expansion that began in December 1982.

    As Exhibit 1 shows, the economic record of the last 17 years is remarkable, particularly when viewed against the backdrop of the 1970s. The United States has experienced two of the longest and strongest expansions in our history back to back. They have been interrupted only by a shallow eight-month downturn in 1990-91.



    Chart 1
    Even with the growing surplus, however, a small but vocal faction in Congress opposes any policies that would allow taxpayers to keep more of their own money through real tax cuts and that generally would shift power from the government to the people. This attempt to rewrite history should not be surprising. Proponents of additional government spending try to make the Reagan boom appear to be a bust because they fear that Reagan's success will help President Bush build popular support for lower taxes, further deregulation, and reduced government spending. But their rhetoric is easily countered by the evidence.

    history confirms the soundness of the Reagan, and now Bush, approach to economic policy. Under President Reagan, federal revenues increased even with tax cuts, federal spending did not decrease, the country experienced the longest period of sustained growth during peacetime in its history, and the rich paid more taxes proportionately than they had before the tax cuts were implemented.
    HOW DID THE REAGAN TAX CUTS AFFECT THE U.S. TREASURY?

    Many critics of reducing taxes claim that the Reagan tax cuts drained the U.S. Treasury. The reality is that federal revenues increased significantly between 1980 and 1990:

        Total federal revenues doubled from just over $517 billion in 1980 to more than $1 trillion in 1990. In constant inflation-adjusted dollars, this was a 28 percent increase in revenue.3

        As a percentage of the gross domestic product (GDP), federal revenues declined only slightly from 18.9 percent in 1980 to 18 percent in 1990.4
        Revenues from individual income taxes climbed from just over $244 billion in 1980 to nearly $467 billion in 1990.5 In inflation-adjusted dollars, this amounts to a 25 percent increase.

    HOW DID REAGAN'S POLICIES AFFECT FEDERAL SPENDING?

    Although critics continue to focus on President Reagan's budget "cuts," federal spending rose significantly during the 1980s:

        Federal spending more than doubled, growing from almost $591 billion in 1980 to $1.25 trillion in 1990. In constant inflation-adjusted dollars, this was an increase of 35.8 percent.6

        As a percentage of GDP, federal expenditures grew slightly from 21.6 percent in 1980 to 21.8 percent in 1990.7

        Contrary to popular myth, while inflation-adjusted defense spending increased by 50 percent between 1980 and 1989, it was curtailed when the Cold War ended and fell by 15 percent between 1989 and 1993. However, means-tested entitlements, which do not include Social Security or Medicare, rose by over 102 percent between 1980 and 1993, and they have continued climbing ever since.8
        Total spending on all national security programs never equaled domestic spending, even when Social Security, Medicare, and net interest are excluded from domestic totals. In addition, national security spending fell during the Administration of the senior President Bush, while domestic spending increased in both mandatory and discretionary accounts.9 (See Chart 1.)




    HOW DID REAGAN'S POLICIES AFFECT ECONOMIC GROWTH?

    Despite the steep recession in 1982--brought on by tight money policies that were instituted to squeeze out the historic inflation level of the late 1970s--by 1983, the Reagan policies of reducing taxes, spending, regulation, and inflation were in place. The result was unprecedented economic growth:

        This economic boom lasted 92 months without a recession, from November 1982 to July 1990, the longest period of sustained growth during peacetime and the second-longest period of sustained growth in U.S. history. The growth in the economy lasted more than twice as long as the average period of expansions since World War II.10

        The American economy grew by about one-third in real inflation-adjusted terms. This was the equivalent of adding the entire economy of East and West Germany or two-thirds of Japan's economy to the U.S. economy.11
        From 1950 to 1973, real economic growth in the U.S. economy averaged 3.6 percent per year. From 1973 to 1982, it averaged only 1.6 percent. The Reagan economic boom restored the more usual growth rate as the economy averaged 3.5 percent in real growth from the beginning of 1983 to the end of 1990.12

    HOW DID REAGAN'S POLICIES AFFECT THE FEDERAL TAX BURDEN?

    Perhaps the greatest myth concerning the 1980s is that Ronald Reagan slashed taxes so dramatically for the rich that they no longer have paid their fair share. The flaw in this myth is that it mixes tax rates with taxes actually paid and ignores the real trend of taxation:

        In 1991, after the Reagan rate cuts were well in place, the top 1 percent of taxpayers in income paid 25 percent of all income taxes; the top 5 percent paid 43 percent; and the bottom 50 percent paid only 5 percent.13 To suggest that this distribution is unfair because it is too easy on upper-income groups is nothing less than absurd.

        The proportion of total income taxes paid by the top 1 percent rose sharply under President Reagan, from 18 percent in 1981 to 28 percent in 1988.14

        Average effective income tax rates were cut even more for lower-income groups than for higher-income groups. While the average effective tax rate for the top 1 percent fell by 30 percent between 1980 and 1992, and by 35 percent for the top 20 percent of income earners, it fell by 44 percent for the second-highest quintile, 46 percent for the middle quintile, 64 percent for the second-lowest quintile, and 263 percent for the bottom quintile.15
        These reductions for the lowest-income groups were so large because President Reagan doubled the personal exemption, increased the standard deduction, and tripled the earned income tax credit (EITC), which provides net cash for single-parent families with children at the lowest income levels. These changes eliminated income tax liability altogether for over 4 million lower-income families.16

    Critics often add in the Social Security payroll tax and argue that the total federal tax burden shifted more to lower-income groups and away from upper-income groups; but President Reagan's changes were in the income tax, not in the Social Security payroll tax. The payroll tax was imposed by proponents of big government over the past 50 years, and it is they, not Ronald Reagan, who should be held accountable for its distributional effects.

    Nevertheless, even if one counts the Social Security payroll tax, the share of total federal taxes increased between 1980 and 1989 for the following groups:

        For the top 1 percent of taxpayers, from 12.9 percent in 1980 to 15.4 percent in 1989;

        For the top 5 percent of taxpayers, from 27.3 percent in 1980 to 30.4 percent in 1989; and
        For the top 20 percent of taxpayers, from 56.1 percent in 1980 to 58.6 percent in 1989.

    On the other hand, the share of total federal taxes, if one includes the Social Security payroll tax, declined for four groups:

        For the second-highest 20 percent of taxpayers, from 22.2 percent in 1980 to 20.8 percent in 1989;

        For the middle 20 percent of taxpayers, from 13.2 percent in 1980 to 12.5 percent in 1989;

        For the second-lowest 20 percent of taxpayers, from 6.9 percent in 1980 to 6.4 percent in 1989; and
        For the lowest 20 percent of taxpayers, from 1.6 percent in 1980 to 1.5 percent in 1989.17

    CONCLUSION

    No matter how advocates of big government try to rewrite history, Ronald Reagan's record of fiscal responsibility continues to stand as the most successful economic policy of the 20th century. His tax reforms triggered an economic expansion that continues to this day. His investments in national security ended the Cold War and made possible the subsequent defense spending reductions that are largely responsible for the current federal surpluses. His efforts to restrain the expansion of federal government helped to limit the growth of domestic spending.

    If Reagan's critics had been willing to work with him to limit domestic spending even further and to control the growth of entitlements, the budget would have been balanced five to ten years sooner and without the massive tax increase imposed in 1993. Today, Members of Congress from across the political spectrum should stand on the evidence and defend the Reagan record.

    To the extent that President Bush's proposals mirror those of Ronald Reagan, his plan should be a welcome strategy to lower the tax burden on Americans and to make the system more responsible. If the advocates of big government in Congress cooperate with President Bush rather than merely continuing to fund obsolete, wasteful, and redundant programs, there is no limit to the prosperity that Americans can generate.

    Peter Sperry is the Grover M. Hermann Fellow in Federal Budgetary Affairs in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation.

http://www.heritage.org/research/reports/2001/03/the-real-reagan-economic-record


HOPE THIS HELPS!

Factually inadequate articles don't gain credibility the more they're posted.

Hey Coach,

Thanks for the parting gift -- an item of propaganda that was rather easily refuted on my part. It was an instructive read in some sense, however, and so I appreciate it.

Let's briefly look at the blatant contradictions in the linked article by parsing what I shall here call the Magical Happy Reagan Was Amazing narrative from the actual data.

Here's the happytime narrative:

1. "...by 1983, the Reagan policies of reducing taxes, spending, regulation, and inflation were in place. The result was unprecedented economic growth."

--Ok, so Reagan had a cluster of policies that reduced taxes, spending, regulation, and inflation. Once in place, these policies propelled the economy to an "unprecedented" period of growth.

2. "From 1950 to 1973, real economic growth in the U.S. economy averaged 3.6 percent per year. From 1973 to 1982, it averaged only 1.6 percent. The Reagan economic boom restored the more usual growth rate as the economy averaged 3.5 percent in real growth from the beginning of 1983 to the end of 1990."

--Some details about this "unprecedented" panacea of economic growth.

3. The propaganda piece concludes, "No matter how advocates of big government try to rewrite history, Ronald Reagan's record of fiscal responsibility...."

--Advocates of big government oppose Reagan's great record of fiscal responsibility and wish to tarnish it as best as they are able, for fear of another such period under George W. Bush which will permanently shrink the size of government (lol).

[syntaxmachine]

Great, now here are the facts, pulled from the very same propaganda piece as the above narrative:

1a. Recall part 1 of the narrative, "...by 1983, the Reagan policies of reducing taxes [and] spending ... were in place. The result was unprecedented economic growth."

Pieces of data mentioned in the very same article:

"Federal spending more than doubled, growing from almost $591 billion in 1980 to $1.25 trillion in 1990. In constant inflation-adjusted dollars, this was an increase of 35.8 percent."

--Uh...ok.

"Revenues from individual income taxes climbed from just over $244 billion in 1980 to nearly $467 billion in 1990.5 In inflation-adjusted dollars, this amounts to a 25 percent increase."

--Great, so the government was deriving even more revenue from taxing citizens than it was before Reagan.

1. is not consistent with 1a., both of which are from the same article. Logic fail. Mind you, this is from an elite conservative think tank based in the capital of this country....

Regarding 2, the article admits the "unprecedented" growth really amounted to an average rate of 3.5% per year, which is below the average rate between 1950-1973. Also, given the statistics I've mentioned earlier, it's hard to see how Reagan's tax cuts could be causally responsible for this. Tax revenue as a percentage of GDP (money the government is siphoning from the productive economy) barely nudged downward. Did that stimulate the growth or are there better explanations rooted in secular economic trends? In any case, Reagan hagiographers (thanks avxo) simply act as if it's obvious and undeniable that it was the cuts that were causally efficacious without any argument.

3. The final component of the myth: Reagan was a fiscally responsible man. Again, from the same article:

"Federal spending more than doubled, growing from almost $591 billion in 1980 to $1.25 trillion in 1990. In constant inflation-adjusted dollars, this was an increase of 35.8 percent" (already mentioned above).

Regarding fiscal responsibility, the author of the article somehow forgot to mention the increase in size of the federal workforce and the tripling of the national debt. How ironic, then, that he mentions in the conclusion that "His [Reagan's] efforts to restrain the expansion of federal government helped to limit the growth of domestic spending." If this article isn't a demonstration of a slew of cognitive disorders at work then I don't know what is. The guy isn't even capable of engaging in confirmation bias, or only showing the evidence that supports his ideas: he simply mentions the factual data and then ignores their logical incompatibility with his chosen narrative, LOL.

Hope THIS helps.

[GigantorX]

I don't agree with the deifying of Reagan but I do believe that he was a good President, probably the best man for the job at the time and given the circumstances.

All you have to do is look to his 2 (maybe 3?) terms as Governor of California. He wasn't some dogmatic ideologue or anything, he was a good leader and he actually governed well.

That's what is important.

All just post my comments again from earlier in the thread.

You can also add in the fact that he was able to work with a Democratic Congress for his 2nd term (correct me if I'm wrong) but at the very least he never had the Republicans in both houses.

He was a good president, was he a good conservative by actions? Yes and No. The numbers are there for everyone to see. To me, Reagan was a solid president, perfect for the time he lead in. Great at inspiring confidence, the best at communicating to the people.

I think a leader of his sort would be great right about now. Of course both parties have gone completely off their respective rockers so he probably would end up dead in ditch with Tim Pawlenty.

Oh well.

[avxo]

I think a leader of his sort would be great right about now. Of course both parties have gone completely off their respective rockers so he probably would end up dead in ditch with Tim Pawlenty.

I agree with most of what you wrote. But, the above... QFT.

[garebear]

I'm surprised no one accused Reagan of being a secret Muslim when he pulled forces from Lebanon after the US Marines were killed there.

If a Demcoratic president had done that, we would have at least heard the term "cut and run" and probably would have heard the term "treason".

[GigantorX]

I'm surprised no one accused Reagan of being a secret Muslim when he pulled forces from Lebanon after the US Marines were killed there.

If a Demcoratic president had done that, we would have at least heard the term "cut and run" and probably would have heard the term "treason".

Good point.

And what the hell were the Marines doing in Lebanon anyways? Stayed in their base the whole time and not allowed to perform combat operations. Talk about a bad decision.

[whork]

 

People felt a recovery in their lives and the nation had a sense of leadership.   reagan actually had a demo congress most of his presidency and guess what?  HE WORKED WITH THEM TO GET THINGS DONE! 

Obama, being the arrogant ego manical c vnt he is, won't even work with his own damn party! 

Maybe because its actually possible to work with a DEM congress?

[240 is Back]

1. Reagan and the national debt

Year              Debt Level
09/29/1989       2,857,430,960,187.32
09/30/1988     2,602,337,712,041.16
09/30/1987       2,350,276,890,953.00
09/30/1986       2,125,302,616,658.42
09/30/1985       1,823,103,000,000.00
09/30/1984       1,572,266,000,000.00
09/30/1983       1,377,210,000,000.00
09/30/1982       1,142,034,000,000.00
09/30/1981       997,855,000,000.00

http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt_histo4.htm

Since budgets are submitted a year in advance (e.g., FY1981's budget was submitted in 1980), Reagan's budgets run from 1981-1989. As you can see, the national debt nearly tripled during this period, starting out at $997.9 billion and ending up at $2.8 trillion. The last tripling of the debt had taken 31 years.

2. Reagan and spending as a percentage of GDP

Year          GDP           Population  Spending % of GDP
1981     3126.8   228.670   33.64 %
1982     3253.2   230.815   36.25    %
1983     3534.6   232.979   36.31    %
1984     3930.9   235.164   34.44    %
1985     4217.5   237.369   35.48    %
1986     4460.1   239.595   35.71    %
1987     4736.4   241.842   35.09    %
1988     5100.4   244.110   34.73    %
1989     5482.1   246.399   34.93    %

http://www.usgovernmentspending.com/downchart_gs.php?year=1900_2010&units=p&title=Spending%20as%20percent%20of%20GDP

These numbers are slightly different than my original post because this man in particular used interpolation. In any case, he derived the values from the appropriate governmental sources as far as I can tell; his findings are in line with what everybody else discovers: government spending as a percentage of GDP only went up under Reagan (by 3.7% according to these numbers and 2.8% according to my other post's numbers).

This guy is apparently a conservative author, tea party sympathizer, and climate skeptic.

3. Reagan's amnesty, in addition to his growth of the federal workforce, are commonplace news items and therefore I don't think I need to provide sources. You can easily find them in a moment's notice online in your free time.

4. Reagan's "tax cuts"

Reagan cut taxes early on, but all the while the overwhelming majority of the cuts were balanced out by the elimination and reduction of deductions, plus tax increases later on.

Year   Receipts   As Percentage of GDP
1981   599.3      19.6%
1982   617.8      19.2%
1983   600.6      17.5%
1984   666.4      17.3%
1985   734.0      17.7%
1986   769.2      17.2%
1987   854.3      18.4%
1988   909.2      18.2%
1989   991.1      18.4%

http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=200

The overwhelming majority of government revenue comes from taxes; as you can see, the government derived only a little less tax revenue from the American people under Reagan than when he first came into office (a little over 6% less by the end of the Reagan era). In other words, Reagan kept the percentage above the historical average of 18.1%, and never seriously considered pushing it below the average.

5. Finally, a favorite of liberal presidents, entitlement spending

Year    Billions spent on SS and Medicare   As % of GDP
1981    179.1                                        5.9%
1982    203.1                                        6.3%
1983    224.0                                        6.5%
1984    237.0                                        6.2%
1985    256.1                                        6.2%
1986    270.7                                        6.1%
1987    285.0                                        6.1%
1988    302.5                                        6.0%
1989    324.4                                        6.0%

Avg percentage of GDP: 6.14%
Avg percentage under Carter: 5.44%

http://www.whitehouse.gov/omb/budget/Historicals/ (Tables 15.4-15.5)

Reagan increased entitlement spending by hundreds of billions of dollars, doing so at a clip Carter would have been envious of (as evinced by the percentage of GDP values).

In short, your idol was a very "liberal" president, based on your own criteria of liberalism. The man went hog wild with governmental spending, increasing the share of GDP the government spent, tripling the deficit (the previous tripling had taken 31 years), expanding the federal workforce, granting amnesty to millions of illegals, pumping up entitlement spending in absolute and relative terms, and doing precisely nothing to decrease the amount of tax revenue the government siphons from the people below its historical average.