Wonk Room » The Return Of The Reagan Era Philosophy

The Return Of The Reagan Era Philosophy — ‘Deficits Don’t Matter’

By Sarah Dale on Apr 10th, 2008 at 8:20 pm

The Return Of The Reagan Era Philosophy — ‘Deficits Don’t Matter’»

reagan It’s no shock that John McCain’s statements about economics are clueless, but it’s becoming increasingly clear that his uninformed views are also quite radical.

In a burst of Reagan-style policy making, McCain has offered to balance the budget by decreasing federal expenditures. In a campaign event in Connecticut this week, McCain responded to a question by stating:

“When Ronald Reagan came to office,’’ he said, noting that few in the audience were old enough to remember, “we had 10 percent unemployment, 20 percent interest rates, and 10 percent inflation, if I’ve got those numbers right. That was when Ronald Reagan came to office in 1980. And so what did we do? We didn’t raise taxes, and we didn’t cut entitlements. What we did was we cut taxes and we put in a stimulus to the economy, and by the way, Jack Kennedy also did that as well – and so my answer to it is a growing economy. And I think you best grow the economy by the most efficient use of the tax dollar.’’

As The Huffington Post has rightly noted, though, “the deficit nearly tripled during the Reagan presidency, partly due to tax cuts and increases in military spending.”

McCain’s supply-side economic plan doesn’t just end with decreased spending — he parrots the failed 1980’s era Reagan policies of huge tax cuts and prolonged military spending, with no plan on how to balance the budget. Newsweek’s Daniel Gross says it all: “McCain’s fiscal program is either a joke or a fantasy.”

Perhaps McCain believes that “Reagan really did show that deficits don’t matter.“

Comments
3

Sort Comments By: Top Rated | Date

3 Responses to “The Return Of The Reagan Era Philosophy — ‘Deficits Don’t Matter’”

christopher wiwi Says:

To put another chimp in the white house would be akin to 4 more years of “RAGANOMICS”, imagine that! sarcasm
April 11th, 2008 at 2:23 am
Sachem Says:

Let’s be very clear about what really happened. We’ve had several distinct business cycles since then with recessions in 91-92, 01-02 and the present one. Our capacity to grow our economy as a whole has been exported to Asia, and as such making the deficit a smaller percentage of the GDP and the overall debt remain serviceable is no longer a reality.

Borrowing money from China to fight wars or build roads must be reduced or there will be a meltdown of the international monetary system. The ironic part of this is, China still thinks that we’ll be able to buy the endless stream of junk that they import to us. We won’t.
April 11th, 2008 at 10:22 am
Mugsy Says:

Reagan didn’t grow the economy through “tax cuts”, he ran the country on borrowed money. The government spent money like a drunken sailor (my apologies to any drunken sailors reading this) on nonsense like “Star Wars”, and a different micro-war a week: Nicaragua, Grenada, Panama, El Salvador, etc.

And as McCain (and every other Republican) seems quick to forget, Reagan actually RAISED taxes four of his eight year in office, all in the name of trying to manage the mounting debt his policies were creating. Yet, by their own admission, “the economy grew”.

Today, Bush (and now McCain) have selectively chosen to remember only HALF of Reaganomics… the part about cutting taxes… but absolutely nothing about raising taxes to try and manage the National Debt (and what a failure it was because spending was not cut.)
April 12th, 2008 at 12:00 pm