McCain: I'll Cut Deficits Like Reagan.............

[nhboy]

Asked About the Deficit, McCain Cites Reagan’s Example

"WESTPORT, Conn. – When Senator John McCain was asked here this afternoon how he plans to balance the budget, he said that he hoped to do so by stimulating economic growth – and approvingly cited the example of President Ronald Reagan.

There was one thing he did not mention during his response: the deficit nearly tripled during the Reagan presidency, partly due to tax cuts and increases in military spending.

The exchange occurred at a town-hall-style meeting held in a tent outside Bridgewater Associates, an investment firm. A member of the audience stood up and asked Mr. McCain, who has called for balanced budgets, how he plans to do it. "

Asked About the Deficit, McCain Cites Reagans Example - The Caucus - Politics - New York Times Blog

 

[Larry Gude]

Well...

...we make allowances for McCain. He already said he doesn't know anything about economics. It's the thought that counts.

the deficit nearly tripled during the Reagan presidency, partly due to tax cuts and increases in military spending.

 

[This_person]

There was one thing he did not mention during his response: the deficit nearly tripled during the Reagan presidency, partly due to tax cuts and increases in military spending.

Lowering the tax burden has been proven to stimulate the economy and generate increased revenue due to a stronger economy.

Military spending increased, as did social program spending as part of the negotiation process to get the military spending increased. The fault was increased spending, not tax cuts.

When we stop spending money for things other than what is in the Constitution to spend money on, we'll lower the budget deficits. Probably not before.

 

[awpitt]

Lowering the tax burden has been proven to stimulate the economy and generate increased revenue due to a stronger economy.

Military spending increased, as did social program spending as part of the negotiation process to get the military spending increased. The fault was increased spending, not tax cuts.

When we stop spending money for things other than what is in the Constitution to spend money on, we'll lower the budget deficits. Probably not before.

RWR was the one man in Washington, at that time, who had the power to put a stop to the spending. He didn't. We can blame Congress who was under split party control back then (House-Dems/Senate-GOP) but we expect more spending from Congress. Reagan could've stopped it with a stroke of the veto pen.

 

[This_person]

RWR was the one man in Washington, at that time, who had the power to put a stop to the spending. He didn't. We can blame Congress who was under split party control back then (House-Dems/Senate-GOP) but we expect more spending from Congress. Reagan could've stopped it with a stroke of the veto pen.

I agree. And, I agree he should have, as should have Bush 41, Slick Willie, and Bush 43. 43 is the one I am most annoyed with for having not done it with a Republican majority.

I was just saying that they end up negotiating, so that each side gets what it wants. Reagan would not have accomplished what he did without providing the spenders what they wanted, and they wouldn't have gotten what they wanted without giving Reagan what he wanted.

So, we get led in different directions, until we're horribly fractured. Bush 43 had the chance to change all of that and lead the country in ONE direction. He and his Republican Congress screwed that chance up.

The point was that the tax cuts work to raise the economy, but both the executive and legislative branches have to not screw that up.

 

[Larry Gude]

That's not...

RWR was the one man in Washington, at that time, who had the power to put a stop to the spending. He didn't. We can blame Congress who was under split party control back then (House-Dems/Senate-GOP) but we expect more spending from Congress. Reagan could've stopped it with a stroke of the veto pen.

...fair. No one is a king in this land, including Reagan. He got what he wanted; tax cuts, the rebirth of our military and the return of the American dream in the popular consciousness. It stands to reason that compromises are a fact of life in politics for anyone.

If you recall, Graham/Rudman was signed into law. Congress did not hold up it's end of the deal. Yes, Reagan could have not signed much spending into law, but, again, is that a fair way to look at it?

People obsess about debt without giving it context. If the nation had a $1 annual budget and a $1 debt with a $.05 deficit, that is the exact same thing as a $1 trillion budget with a trillion dollar debt and a $50 billion deficit.

The economy grew under Reagan. Debt and deficits, whatever their size, can only fairly be judged as %'s of GDP and federal budget because that's where the ability to service those debts comes from.

We can have economic arguments all day long; good ones, valid ones, but that can't happen until people agree on the basic fundamentals of the point of the debate.

It's pointless to say Reagan exploded the national debt without also saying he exploded the national income and then examine the context. That goes for Reagan, that goes for both Bush's and that goes for Clinton and Carter and Ford and Nixon.

Context and perspective.

 

[Mateo]

Actually. when you ponder it, a lot of this goes back to the 60's and the expanded visions of the "Boomers" . We had a war(oops..a "police action in RVn"), the "War on Poverty", the Race for Space with the end product, the moon landing at the end of the decade. It definitely was a time of great expectations, and the reality of it was that taxes were not raised then amidst all this prosperity to cover all these progams as well as the cost of the war(oops.there I go again...."Police action").
We are still paying the price for all the shortsightedness now.
So much for Camelot.

 

[SamSpade]

...
People obsess about debt without giving it context. If the nation had a $1 annual budget and a $1 debt with a $.05 deficit, that is the exact same thing as a $1 trillion budget with a trillion dollar debt and a $50 billion deficit..

That's correct, but slightly misleading. The $1 debt is existing debt - not the expense it takes to operate the government. It doesn't sound like much, but that 5 cent deficit will be another dollar deficit in just 13.5 years.

I mean, if you make 100k a year, we presume your expenses per year are about that much. Now we ADD an additional burden of debt equal to how much you make - say, a credit card with a 100k balance on it - and you just pay the minimums on it. And instead of cutting it up, like you should - each year you spend another 5,000 on it. You'd be bankrupt real fast.

Take the first scenario - you don't do anything. In just under 14 years, you have twice the debt you had before. It's not rocket science - the only way you recover from this is to either cut spending or to make an obscene amount of money.

 

[Larry Gude]

That's...

Take the first scenario - you don't do anything. In just under 14 years, you have twice the debt you had before. It's not rocket science - the only way you recover from this is to either cut spending or to make an obscene amount of money.

...correct but growth makes room as does debt retirement, it's not static and it's not like the debt is structured on 50 or 100 year notes.

The debate should lie in three points;

What is a healthy percent, for the overall economy, of GDP to go towards government?

What is a reasonable total debt as a % of GDP?

What is a reasonable deficit and how should it be handled?

Dick Armey made the argument that, historically, government being 17% of gdp was a nice number for overall economic health and a reasonable level of government services. We're way over that now.

Deficits should be short term as they represent an unexpected expense either in spending, tax revenue or both.

The total debt should be as small as possible and perhaps should not exceed 25-50% of gdp. We're at something like 70% now.