There's been a great deal of back of forth about Clinton and Obama and what they have said about Reagan. Personally, I've missed most of it. Being a stock market person I've been a little preoccupied over the last few weeks. But, I think it's time to chime in on the debate because the underlying facts -- those pesky things -- aren't very flattering to Reagan. In fact, the facts -- again, those pesky annoying things -- indicate that Reagan was a complete and total fiscal disaster.
First, let's go to the charts, shall we? It wouldn't be a Bonddad diary without charts and graphs. Let's start with Reagan's buying the "tax cuts pay for themselves" line of reasoning. Here is a graph from the St. Louis Federal Reserve of the year-over-year percentage change in tax receipts.
If you look closely at the tax receipts under Reagan and compare them to other periods you will notice a clear pattern: there is no meaningful difference between the yearly change in tax receipts under Reagan and any period before or after. This tells us a very important fact: tax receipts -- and the growth thereof -- is as much a function of overall economy growth as the actual tax rate.
OK -- let's see how much of a fiscal conservative Reagan was. Here is a graph of federal expenditures in red and federal receipts in blue.
Does anyone notice a pattern? In case you have a hard time figuring it out, let me provide some clarity.
-- Reagan -- the fiscal conservative -- never balanced a budget.
-- Reagan -- the fiscal conservative -- never came close to balancing a budget.
-- Reagan -- the fiscal conservative -- never even came remotely close to even thinking about balancing a budget.
So, how did Reagan pay for this? He mired the country is a mammoth explosion of Federal debt. Let's place this in historical context. Here is a graph of total federal debt going back to 1940, again from the St. Louis Federal Reserve.
Does anybody notice a pattern? The fiscally conservative party -- at least in theory -- have indebted this country since 1980 with a mammoth amount of debt.
Now -- let's look a little closer at the 1980s.
Saint Ronnie -- the great Saint who many are praising in one form or another -- nearly tripled the national debt. St. Ronnie -- the fiscal conservative who we all should bow down and worship -- paid for his massive expanse of the federal government (because he never balanced a budget) by pawning off the expense on the next generation. St. Ronnie used his great communication skills to tell us this was all somehow OK.
St. Ronnie was an asshole.