published Saturday, November 12th, 2011

Reagan's regrets on taxes and 'spending cuts'

One of the greatest regrets of several members of the generally sound Reagan administration was that in an effort to cut spending significantly, President Reagan went along with some tax hikes sought by Democrats in his first term in office.

It seemed like a good idea at the time: Supposedly there would be $3 worth of spending cuts for every $1 in tax increases.

But it didn't work out that way.

The tax increases were imposed, but the spending cuts failed to materialize. As Reagan later wrote, "The Democrats reneged on their pledge and we never got those cuts."

We are witnessing a similar bait and switch today.

A bipartisan "super committee" in Congress has until just before Thanksgiving to devise some kind of plan to reduce our nation's budget deficits by $1.2 trillion or so over the coming decade. If the committee members reach an agreement -- which is by no means assured -- the full Congress will vote on it.

The trouble is, Democrats are demanding tax increases as part of the plan. But while those tax increases would surely occur very soon, any supposed spending cuts in the plan would be parceled out over the coming decade, which means they might not occur at all. Cuts that today's Congress approves could readily be reversed by a future Congress -- while the tax increases were left firmly in place.

As Reagan painfully learned during his administration, the end result very likely would be still more spending -- and higher taxes to boot!

So it is entirely appropriate that 33 U.S. senators have signed a letter urging the super committee in Congress not to propose any plan that includes a net increase in taxes.

Republican Sens. Saxby Chambliss and Johnny Isakson of Georgia and Jeff Sessions and Richard Shelby of Alabama are among those who signed the letter, which also urged the committee to offer a proposal that would balance the budget within a decade and reform costly entitlement programs to make them solvent.

The senators' insistence on no net tax increase is commendable. And it is in stark contrast to those who think that the federal government should be spending even more taxed and borrowed dollars.

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conservative said...

Thank you ! Up untill Obamination Congress spent about $1.40 for every $1.00 it received in taxes and now under Obamination the ratio is of course worse. It is IMPOSSIBLE to reduce our debt no matter how much taxes are raised when we spend 40% more than we take in. Our collective debt just like any personal debt is caused by SPENDING!

November 12, 2011 at 8:13 a.m.
EaTn said...

Ronald Reagan was a mediocre actor/president.

November 12, 2011 at 4 p.m.
conservative said...

To make matters worse 47% of American households pay no federal income taxes. They are the ones eligible for food stamps, free school lunches for their children, free or heavily subsidized health care, subsidized rent, section 8 housing, wellfare, and tax credits to name some. These 47% are responsible for much of our debt yet irresponsibly clamor for more programs for which they will qualify. The makers have got to get control if this country is to survive.

November 12, 2011 at 4:59 p.m.
chet123 said...

CONSERVATIVE....Where were you when George Bush dumped this deficit on Obama that was once a surplus...hmmmmm...i dont expect this or any President to clear this mess in only 4 years.....Obama is doing fine with a do nothing republican congress who have about 3% approval rating...

CONSERVATIVE...You say 47% of American households pay no incomes Taxes,,,really, really.....What does that say about the income gap between the "working/middle class" and the "rich and greedy" hmmmmm..hmmmmmmm.thanks for making my point for me....

November 12, 2011 at 5:14 p.m.
Rickaroo said...

Chet, 47% is stuck on con's brain like a tumor. He whines about that all the time. It's perfectly okay in his mind that the big corporations get their corporate welfare and the super rich have all their tax loopholes that cut their taxes to even less than what the middle class pays, but it makes him ill to think that the poor, the unemployed, and those on SS, who make up the majority of that 47%, don't pay any federal income tax. Of course, they don't make enough to pay in the first place but he thinks that they should be bled even dryer than they already are. How he thinks that taking money they don't even have from those who have to struggle to put food on the table and pay the rent or mortgage will alleviate the deficit is anybody's guess but such is his logic.

November 12, 2011 at 8:04 p.m.
SCOTTYM said...

"Where were you when George Bush dumped this deficit on Obama that was once a surplus...hmmmmm"

Propaganda alert!!!! Good propaganda always has a kernel of truth, and I see it. The total federal budget did have surpluses in the past. Of course it hasn't happened since 1957, and the lie is that it has happened much more recently and was pi$$ed away by GWB.

Dem pols like to pat themselves on the back and give kudos to WJC who occupied the WH during the late 1990's, and the Repub pols like to point out that it was an actual Repub Congress (House AND Senate) what done it.

They both lie.

The only way the Total Fed Debt can increase, year over year, is for Fedgov to spend/promise more cash/services than they can pay for with a given amount of revenue.

This is a fact. It is irrefutable.

Spending more than collected, and increasing the Total Fed Debt, year over year, is exactly the opposite of a Surplus.

A true surplus will lower the Total Fed Debt, year over year, because more money would be flowing in than is spent.

This is another irrefutable fact.

The Treasury tracks the Total Fed Debt, as well as many other useful facts. You can pull up the numbers that the "Clinton/RepubCongress Surplus" obfuscationists use by looking at the "Publicly Held" Debt numbers. That's the one that assumes all the folks who paid into Social Security, Federal Workers Pensions and the like, will never have to be repaid. This is, of course, idiocy. They will want their money/services and it is a real liability, monetary wise. If a Private Entity, did the same sort of bookkeeping, you'd have another Enron. Folks would go to jail.

Look at the numbers for yourself.

http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt_histo4.htm

November 13, 2011 at 12:28 a.m.
SCOTTYM said...

"Obama is doing fine with a do nothing republican congress who have about 3% approval rating"

Another bit of Propoganda.

When only one half of the Congress is controlled by the Republicans(The House, which has been passing "Jobs Bills" left and right), while the Senate is under the full control of the Democrats (Who have been doing everything they can to block anything the House does) calling it a "do nothing republican congress" exposes you as a know-nothing propagandized fool.

November 13, 2011 at 12:37 a.m.
SCOTTYM said...

"CONSERVATIVE...You say 47% of American households pay no incomes Taxes,,,really, really.....What does that say about the income gap between the "working/middle class" and the "rich and greedy" hmmmmm..hmmmmmmm.thanks for making my point for me...."

ROFLMAO, you are so dense.

A statistic about what percentage of people pay for the Fedgov versus who doesn't pay, says nothing about an "income gap" except that some percentage earn enough that they are forced to pay the into the collective, while others fall below the arbitrary, political, line between payers and non-payers.

I am a card carrying member of the "working/middle class" you are so worried about. I can assure you, I pay plenty of taxes.

I pay every year. I send checks in on a quarterly basis, any two of which are larger than the total cost of the car I drive(to be fair, I drive cheap). It's a bit of a game for me. I try to balance the tax payments as closely as possible so that I don't owe anything other than a quarterly check on April 15th, but not so close that I underpay by some nominal amount and get hit with a punitive charge. I don't want a refund as a "net payer""aka the 53%" getting a refund has just loaned the government money interest free.

Apparently I one of the folks who are not the 1% at the top(bless their souls) who pay a very large portion of all taxes, but, instead, the 52% of folks who pay all the rest.

Most of the checks that I deposit in the company accounts, from which I draw my own paychecks, are written by folks/entities with larger incomes and greater wealth than myself.

You'd do well to study up on the finite vs. infinite wealth theory. The pie is not a set size. If it were we'd still be living in caves and throwing rocks at rabbits to get our dinner.

November 13, 2011 at 1:15 a.m.
SCOTTYM said...

"How he thinks that taking money they don't even have from those who have to struggle to put food on the table and pay the rent or mortgage will alleviate the deficit is anybody's guess but such is his logic."

Perhaps you are referring to earlier postings by con, but as for the above comment, he/she made no such argument.

You've constructed a straw man and flailed away.

Those with a modicum of historical knowledge know that one cannot tax their way out of the current deficits. It doesn't matter who you tax or how much. The Federal gov, since the ratification of the 16th Amendment, has never taken more than +/-20% of GDP no matter what the tax rates are on whom. The historical average is closer to 18.5% of GDP. So long as the gov spends 24%+ percent of GDP, there will always be deficits, and very large ones at that.

November 13, 2011 at 1:35 a.m.
conservative said...

Have you noticed that those who pay no federal income taxes are the loudest in demanding that those who do, pay even more?

November 13, 2011 at 9:05 a.m.
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