NYT: (Reagan) Fiscal Legacy: Favoring Tax Cuts...Tolerating Deficits

[DeepModem Mom]

THE FISCAL LEGACY
Favoring Tax Cuts and Tolerating Deficits
By DAVID E. ROSENBAUM

Published: June 10, 2004


...The federal deficit grew to $208 billion in the 1983 fiscal year, Mr. Reagan's second budget year, from $79 billion in the 1981 fiscal year, the last year the government operated under a budget prepared by President Jimmy Carter. As a percentage of the national economy, the deficit in 1983 was 6 percent, the highest ever, up from 2.6 percent in 1981.

The large deficits were antithetical to Mr. Reagan's view of himself as a fiscal conservative, and he never seemed completely reconciled to them. He signed tax increases later in his first term that repealed more than one-third of the 1981 tax cuts. But the lesson the Republicans in power today took from the Reagan experience was that they could disregard deficits. President Bush's first treasury secretary, Paul H. O'Neill, reported in his book, "The Price of Loyalty," that at a crucial budget meeting, Vice President Dick Cheney brushed off a question about the deficit by saying, "Reagan proved deficits don't matter."...

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Another lesson the current administration took from the Reagan years is that it can be politically advantageous to publish budgets with numbers that are less than fully honest....

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The budgets prepared by David A. Stockman, Mr. Reagan's first budget director, adopted what was called a "rosy scenario" - impossibly optimistic predictions about future growth, inflation and interest rates. They also included what was called the "magic asterisk" - a gimmick that allowed for the budgeting of unspecified, and never intended, spending cuts.

Both techniques allowed the budgets that were submitted by the White House to Congress in January or February to show lower deficits than what was probable....

(More in the article, including info on changing tax policy since Reagan.)


http://www.nytimes.com/2004/06/10/politics/10budget.html

[papau]

1. A Reagan Tax move by Kerry is a $300 B tax increase-or 3 Trillion over 10y

Reagan after 1981 did 2.6% of GDP in tax increases in first term to fix disaster of a 25% decrease in the annual FIT tax in Aug 81.

Now 2.6% of current 12 trillion GDP is about $300 billion - or a tax increase of more than $3 trillion over 10 years.

The Kerry Tax increase - I doubt he'll get close to that size of a tax increase. But I would like to see a REAGAN SIZED TAX INCREASE SOON!

:-)

[gratuitous]

2. In plain English

That means having a big toot of a party with borrowed money. Sooner or later, the party's over, and the bills have to be paid. The Republicans have mastered the art of looting the Treasury for their overrich friends, while dunning workers to replenish it. If you suggest that the overrich start paying their share of taxes, someone will hysterically scream that you're supporting class warfare and wealth distribution.

It's all the better when the hysterical screamer is someone who's taken it in the shorts from Republican economic policies: Poor AND stupid.