Reaganites: Reagan Would Never Support Extending the Bush Tax Cuts

Republicans Betray Theories of Regananomics
Republicans Betray Theories of Regananomics

Earth to the Republican Party: David Stockman, the architect of Reaganomics, declared on NPR that “Reagan would never support extending the Bush tax cuts.” Stockman took this assertion a step further in calling out the Republican leadership for perverting the notions of fiscal conservatism and betraying what the Party used to stand for. He laid his harshest blame on the Bush administration.

“Only by reducing the growth of government, can we increase the growth of the economy.” ~~ Ronald Reagan

Republicans like Sarah Palin are attempting to disingenuously wrap themselves in Reagan’s mantle when they claim that the Obama administration will be raising taxes on mom and pops across the nation. What they are referring to is the question of whether or not to extend the Bush tax cuts for the wealthy.

Republicans claim that to not extend the unpaid for tax cuts is the same as raising taxes, and they are misrepresenting just who will get hit with higher taxes under the Democrats proposed plan. They are also betraying the theories behind Reaganomics as they do so.

Director of the Office of Management and Budget under Ronald Reagan, and the architect of Reaganomics, David Stockman is convinced that Reagan would never support extending the Bush tax cuts.

Stockman is a conservative Republican who is calling out the current Republican push to extending the Bush tax cuts. Stockton was interviewed on NPR’s August 7, 2010 edition of All Things Considered.

It should be noted that Stockman, creator of the supply side economics/low taxes theory as a way to stimulate growth, became disillusioned with Reaganomics, after he saw the military budget balloon out of control along with the tax cuts which were intended to be for the people going to special interest groups.

Stockman felt the Government wasn’t collecting enough to cover it costs. Stockman left his post in 1995 after Reagan seemed disinterested in his concerns.

William A. Niskanen, chairman of the Cato Institute and a member of President Reagan’s Council of Economic Advisers from 1981 to 1985, wrote a fascinating essay on Reaganomics for the Library of Economics and Liberty. Yes, this is clearly an ultra conservative site, mixing economics with liberty as it does, but I highly suggest reading this informative article.

While it certainly doesn’t tell the other side of the story, and you should bear in mind that as an economic adviser of Reagan’s he may not be completely objective, the man makes some great points. He describes the basis of Reaganomics as:

“Reagan’s 1981 Program for Economic Recovery had four major policy objectives: (1) reduce the growth of government spending, (2) reduce the marginal tax rates on income from both labor and capital, (3) reduce regulation, and (4) reduce inflation by controlling the growth of the money supply. These major policy changes, in turn, were expected to increase saving and investment, increase economic growth, balance the budget, restore healthy financial markets, and reduce inflation and interest rates.”

Anyone interested in the ideology of fiscal conservatism should read people like this. Only then can we really grasp just how far the modern day Republican Party has jumped the fiscal shark.

Stockman, calling the Republicans out on this fact, objected to extending the Bush tax cuts, saying, “So we’re spending $3.8 trillion in defense, non-defense, entitlements, everything else, and we’re taking in only 2.2 trillion. So we got a massive gap. You have to pay your bills; you can’t keep borrowing from the rest of the world at that magnitude, year after year after year. So in light of all of those facts, I say we can’t afford the Bush tax cuts.”

He further suggests that many of our current economic problems are due to the Republicans financial management.

Transcript courtesy of”>NPR:

Mr. STOCKMAN: Because the Republicans abandoned their old-time fiscal religion in favor of two theories, which I think are now proving to be both wrong and highly counterproductive and damaging.

One was monetarism, which said let the dollar float on the international markets. Let 12 men and women at the Fed decide whether to raise or lower interest rates, and use the Fed to try to run this massive economy. What they’ve done instead is run the printing press; they’ve flooded the world with dollars. The whole monetarist policy has been a mistake.

The second thing was the perversion of supply side. Yes, there was a good idea that in certain circumstances, lower tax rates will encourage economic activity and savings. But when you make it a religion, when you make it a catechism and you say you cut taxes no matter what the circumstance, what the season, what the condition, then I think the whole idea has been perverted.

By getting off track over the last 30 years, the Republican Party has basically given up its historic view that the key thing was financial discipline, financial responsibility, and that we had to live within our means. Today, we have two free lunch parties and as a result, we’re borrowing ourselves into grave danger with each passing month and year.

When it comes to financial discipline, even the architect of supply side economics says the current Republican leadership is being disingenuous when they say that the current tax cuts should be extended.

“They (the Bush Administration) sold out the birth right of the Republican Party.”

Stockman is no fan of the Obama administration’s financial actions, either; particularly Stockman does not think Obama should extend tax cuts to the middle class, as he is wont to do.

Stockman, a conservative Republican, feels he’s been moved to the “unwashed” middle and claims he’s had enough of the “crony capitalism”. The architect of Reaganomics does NOT support the current Republican leadership who are ironically wrapping themselves in their warped version of Reaganomics in order to attach their irresponsible ideas to the idolized former President.

By Reagan’s standards, the modern day Republican Party is not a party of fiscal responsibility or discipline. Niskanen is absolutely correct in his final assessment of the Reagan Revolution, which is that while political demand for government services keeps growing, the American people don’t want their taxes raised. This is a problem.

In other words, we are a nation of children being led around by even more hapless leaders who refuse to do the hard work of actually paying for the goodies they hand out, like tax cuts. The only party with the guts to stand for raising taxes on anyone is the Democratic Party, who are pushing to not extend Bush’s tax cuts to the top 2% of the wealthiest in this nation.

Even the architect of Reaganomics can see the inherent problem in the modern day Republicans’ fiscal platform.

3 Replies to “Reaganites: Reagan Would Never Support Extending the Bush Tax Cuts”

  1. I suppose I could say that I do not understand the theory behind the Republicans wanting to continue the Bush tax cuts. But I’m afraid they do. The cult of the elite has bamboozled their membership into thinking that the support of the elite is the only thing that will save this country. When the only thing that will save this country is 99% of the middle class going to work everyday.

    in short, they could give a hoot less about the middle class or the continued success of this country. They are banking on the fact that as soon as they take over the Congress the banks will immediately begin loaning money and the economy will shoot up to the roof. Of course if that is the case and that does happen the next time the Democrats are in office the banks need to be broken down into buildings that have no more than two aisles with two cash registers.

    I do not think that the Republican Party of today is even remotely like the Republican Party of even the Nixon Dick. I think something very severe as happened to the Republican Party and I don’t know what it is. And I don’t think the Democrats do either

    in my mind the tax cuts need to be eliminated period. Both for the middle class and lower class and the upper class. The military budget needs to be cut in half immediately and our social services may become sacred.

  2. Holy crap be careful taking the republican icons name in vain and claim that you know better than “gag” Palin, Rove and Newt the GnoPers will hunt you down by their God and take out back to the wood shed and waterboard you. Only they know what Reagan said or meant or didn’t say or mean or something well by their God they know, and how could you a liberal who actually read the transcripts of the great one and his adviser ever know or how could well you know, know. I just say’in. inb4 jackasses it’s scarcism

  3. Excellent article. As usual, you put the facts out there for people to see, if they bother to open their eyes and read. This particular subject cannot be discussed too much in the upcoming months, as the same old spin will be brought out to dazzle the base and mislead the undecideds.

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