I was reading an article by, of all people, Dan Quayle in the Washington Post, and he mentioned how Ronald Reagan brought down federal tax rates upon his election in 1980. When I think of Reagan, though, the first thing I think of is deficit spending (both good and bad --- good to help us get out of a recession, bad when it continued after the economy recovered). Lowering taxes with out of control, deficit spending? That strikes me as nothing more than political cowardice, and Reagan was the biggest coward of them all.
Let's take the mindset of a financially conservative Republican, eager to label Democrats as the "tax and spend" party. Of course, in real life, they don't necessarily go hand-in-hand. The "spend" is what you're going to pay for, and the "tax" is how you're going to pay for it. You can spend without taxing, and tax without spending.
So really, with a tax and spend dichotomy, you have four options:
- increased spending with increased taxes
- decreased spending with increased taxes
- decreased spending with decreased taxes
- increased spending with decreased taxes
Without going into what the money is being spent on (and taking an overly simplistic look), let's delve into the four options would play out.
Increased spending with increased taxes. This is probably the most politically courageous option: you're upfront with what you're spending on, and risking our Republican's electorate wrath by taxing to pay for it.
Decreased spending with increased taxes. I don't think our Republican would know what to make of this one. To raise taxes while cutting spending suggests that you need the cash in a bad way, perhaps to get the national debt under control. Still, he's not going to like it.
Decreased spending with decreased taxes. The Republican plan under Paul Ryan et al., and presumably John McCain. Cut taxes and spend nothing. I admire this one for its ideological consistency, though it's not very practical. It's certainly not a way to run a country.
Increased spending with decreased taxes. This can be the most disingenuous of the four: you get to say you're cutting taxes, but spending is on the rise. If you're doing so to get out of a recession, that makes fiscal sense: you need to spend to get the economy moving again. However, the crux of Reaganomics was deficit spending even when we were out of the 1980s recession, exploding the national debt from $700 billion to $3 TRILLION, and turning the US from the largest creditor nation to the largest debtor nation.
To me, Reagan is the king of political cowardice: promising lower taxes, but paying for spending by borrowing, and borrowing, and borrowing, letting future generations pay for his economic largesse. I think our Republican friend would point to people who spend and spend by using their credit card instead of cash as "what is wrong with America today." To me, that is a perfect illustration of the Reagan economic policy: getting popular support for cutting taxes, spending like there's no tomorrow, and letting future administrations foot the bill. It's the height of irresponsibility, and why I think Reagan was a political coward.