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Conservatives all over America will be celebrating Ronald Reagan.s 100th birthday on Sunday, February 6th with many tall tales of how great a president he was and of how he reigned in big government, lowered taxes, and the deficit.
The problem is that very little of that is true.
A bit of Reagans fiscal irresponsibility.
The Reagan administration’s hastily prepared fiscal blueprint, however, was no match for the primordial forces — the welfare state and the warfare state — that drive the federal spending machine.
Soon, the neocons were pushing the military budget skyward. And the Republicans on Capitol Hill who were supposed to cut spending exempted from the knife most of the domestic budget — entitlements, farm subsidies, education, water projects. But in the end it was a new cadre of ideological tax-cutters who killed the Republicans’ fiscal religion. David Stockton
A born-again convert to supply side economics, Ronald Reagan came to office in 1981 promising to simultaneously slash taxes, massively increase defense spending and balance the budget. Instead, as his budget director David Stockman acknowledged last year, Reagan produced red ink as far as the eye could see:
"[The] debt explosion has resulted not from big spending by the Democrats, but instead the Republican Party's embrace, about three decades ago, of the insidious doctrine that deficits don't matter if they result from tax cuts."
Which is exactly right. While the Republicans' fiscal rot deepened under George W. Bush, it began with Ronald Reagan. It was the legendary Gipper whose financial recklessness and tax-cutting fetish came to define the modern GOP.
As predicted, Reagan's massive $749 billion supply-side tax cuts in 1981 quickly produced even more massive annual budget deficits. Combined with his rapid increase in defense spending, Reagan delivered not the balanced budgets he promised, but record-settings deficits. Even his OMB alchemist David Stockman could not obscure the disaster with his famous "rosy scenarios."
Forced to raise taxes twice to avert financial catastrophe (a fact conveniently forgotten in the conservative hagiography of Reagan manufactured by the GOP's 2008 ticket of John McCain and Sarah Palin), the Gipper nonetheless presided over a tripling of the American national debt. By the time he left office in 1989, Ronald Reagan more than equaled the entire debt burden produced by the previous 200 years of American history.
For his part, George H.W. Bush hardly stemmed the flow of red ink. And when Bush the Elder broke his "read my lips, no new taxes" pledge to address the cascading budget shortfalls, his own Republican Party turned on him. While Bush's apostasy helped ensure his defeat by Bill Clinton, it was Clinton's 1993 deficit-cutting package (passed without a single GOP vote in either house of Congress) which helped usher in the surpluses and economic expansion of the late 1990's.
Alas, they were to be short-lived. Inheriting a federal budget in the black and CBO forecast for a $5.6 trillion surplus over 10 years, President George W. Bush quickly set about dismantling the progress made under Clinton. Bush's $1.4 trillion tax cut in 2001, followed by a second round in 2003, accounted for half of the yawning budget deficits he produced. Bush's presidency nearly doubled the national debt And as the Center on Budget and Policy Priorities concluded last year, the Bush tax cuts if made permanent would contribute more to the U.S. budget deficit over the next decade than the Obama stimulus, the TARP program, the wars in Afghanistan and Iraq, and revenue lost to the recession - combined.
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