Reagan Deficits

Something that bothers me is the besmirching of President Reagan's economic policies. Reagan is popularly known for tax cuts and big deficits, the latter following the former because of the Reagan defense buildup. Today, a friend told me that a relative's firm postponed delivering a big project proposal for the Navy. She quipped that few things would better commemorate his passing than delivery of a big military contract.

In spite of the fact that this is a pretty funny joke (I laughed) it misses an important issue. Reagan took office when there surpluses were projected for the next five years, plus he proposed substantial spending cuts that combined with the surplus would roughly offset both new defense spending and tax relief, and leave a little to pay down the debt.

Bear this in mind when you consider what followed his inauguration. First, a recession hit - hard. Tax cuts were arguably what kept us from a full-blown depression, but the recession wiped out the surpluses.

However, Keynesian economic doctrine calls for government spending in such situations (let's not forget that responsible historians believe that it was WW2 defense spending that ended the Depression, not the New Deal) which new defense expenditures certainly would be. Reagan also got private citizens to pony up over 70 million dollars to pay for studies to root out government waste. The Grace Commission made over 2000 recommendations that would have saved the taxpayer over 100 billion a year without cuts in essential services. That's not the action of somebody who cares not a farthing for deficits and debts.

Unfortunately, Reagan had to cut ugly deals over his eight years. The man wasn't an emperor. He couldn't just demand that Congress spend money however he pleased. Presidents propose a budget, but Congress must approve it. If he wanted a defense buildup that would win the cold war, Tip O'Neil, Jim Wright and their merry band of New Dealers wanted juicy pork to squander.

In fact, as revenues increased over the bulk of the 1980s, non-military spending increased more. Had congress and the President simply held spending increases to the rate of inflation, the deficits would have disappeared. However, that didn't happen.

Bottom line, Reagan did leave office with huge deficits and debts, but nobody can fairly hang that on his neck alone. Congress had their role to play, and in decades of Democrat domination, picked up some nasty habits when it came to Uncle Sam's charge card.

Contrast the Cold War and the War on Poverty. Which one had graver consequences? Which did we spend the most on? Which one did we actually win?

Reagan might have been heralded by the elites if he had spent the defense budgets on entitlements. However, would we really be better off if we poured the money Reagan spent on defense down Welfare's hole? At least with the Reagan defense spending we have a free Eastern Europe and an end to duck and cover drills to show for it.

Tim McNabb