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

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.