"Reagan Budget Director: ‘Absolutely’ Raise Taxes, Just Like Reagan Did"
As Washington considers ways to rein in the deficit, Republicans have obstinately demanded that any tax revenue increases be taken off the table, claiming that raising taxes during a down economy would doom the recovery. As evidence, they often point to the presidency of Ronald Reagan, claiming his massive 1981 tax cuts caused that decade’s economic boom. But this anti-tax position makes it almost impossible to do anything serious about the deficit, since — despite GOP talking points — the country has a revenue problem, not a spending problem. On ABC’s This Week today, Reagan’s own budget director, David Stockman, exposed the GOP tax cut “theology” for the ahistorical sham it is. Asked by Reuter’s Chrystia Freeland if the economy could “sustain” a tax increase, Stockman said “absolutely,” noting that the economy only recovered under Reagan once he raised taxes in 1982 after “cut[ting] taxes too much” the year before:
FREELAND: You worked for Ronald Reagan. Do you think the American economy — so you’re, like, a red-blooded capitalist — could it sustain higher taxes than it has now?
STOCKMAN: Absolutely. In 1982, we were looking at the jaws of the worst recession since the 1930s. We overdid it in 1981, cut taxes too much. We came back with a big deficit reduction plan in 1982. Unemployment’s at 10 percent, the economy is in dire shape, and we raise taxes by 1.2 percent of GDP, which would be $150 billion a year right now — not 10 years down the road — but right now.
Stockman also attacked Rep. Paul Ryan’s (R-WI) budget plan, noting it “does not cut one dime from the debt” in the next three years. Indeed, in addition to being draconian and regressive, Ryan’s budget fails to acomplish the only thing it sets out to do — solve the deficit — despite claims from Washington journalists that his plan is “serious.”