• Realism About Reagan

      President Ronald Reagan would have been 100 years old yesterday.  Many conservatives are nostalgic for the days when he was president, saying he was the last great fiscal conservative.   He did talk like one:

      “The most terrifying words in the English language are: I’m from the government and I’m here to help.”

      “We who live in free market societies believe that growth, prosperity and ultimately human fulfillment, are created from the bottom up, not the government down.”

      Right on.

      Reagan also read the books of my intellectual heroes, Milton Friedman and F.A. Hayek.

      But let’s not forget that despite President Reagan’s great free market talks, during his 8 years in office, the government:

      • Increased federal spending by 53%.
      • Tripled the federal debt.
      • Increased foreign aid by nearly 120%.
      • Doubled the Department of Education budget, despite promising to eliminate it altogether.
      • Hired almost 250,000 new federal employees.
      • Added more trade barriers than any administration since Herbert Hoover.
      • Ramped up the War on Drugs; created a new “drug czar’s office.”
      • Imposed a 100% tariff on some Japanese electronic products.

        [HT: Mises Institute]

        Regarding the famous Reagan tax cuts, the late economist Murray Rothbard wrote:

        The famous "tax cut" of 1981 did not cut taxes at all. It's true that tax rates for higher-income brackets were cut; but for the average person, taxes rose, rather than declined. … [T]he cut in income tax rates was more than offset by two forms of tax increase. One was "bracket creep," a term for inflation quietly but effectively raising one into higher tax brackets…The second source of higher taxes was Social Security taxation, which kept increasing, and which helped taxes go up overall.

        Reagan may have been known as the anti-government president, but he didn’t slow the growth of government.  It makes me skeptical about the Tea Parties’ and Republicans’ promise to shrink big government.  If the president who  said “government is the problem” couldn’t cut government, can they?

        On my FBN show this week, I’ll talk about that with Reagan’s former budget director, David Stockman.

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