Reaganomics is dead?

Ben Smith notes this odd reasoning by NY Senator Charles Schumer:

reagan_pic.jpgWhere have you gone, Joe DiMaggio? Our nation turns its lonely eyes to you…

“We’re in better shape than [Republicans] are, because they don’t realize that Reaganomics is dead, that the Reagan philosophy is dead,” he said. “We realize that New Deal democracy, which is still our paradigm, which is sort of appeal to each group … that doesn’t work any more.”

He had said a bit earlier, “The old Reagan theory which dominated — which is, ‘Government is bad, it’s out of touch, chop off its hands as soon as it moves.’ — is over.”

A) I think Democrats are in better shape than the Republicans not because the Reagan philosophy is dead, but because Republicans have abandoned the Reagan philosophy.

B) The one bit of the Reagan philosophy, domestically speaking, that hasn’t been more or less ignored has been the tax cuts. And they are working beautifully, thank-you very much.

You can argue all you want about what the right philosophy is, but I certainly don’t think you can argue about the current crop of Republicans (and this absolutely positively includes George W. Bush) having a whole lot to do with the Reagan philosophy. And, since they don’t, I don’t see how you can use them to illustrate a point about the Reagan philosophy.

Unless it’s that Americans don’t have the time of day for pretenders. (via Wizbang)

Comments

  1. Chuckie is tryin to get Luckie. Ever time he thinks of President Reagan, he gets the willies. So here he is whistling past the cemetary once again. Yawn

  2. A tax cut without a commensurate cut in spending does no good.’ -Milton Friedman, RIP Yep, tax cuts are working. Deficits don’t matter. We’ll just print more money. Where’s my credit card? What, it’s in Chinese? Yeww not de boss of mee, I do what I waaaant(cartman voice). V

  3. Vincente: You seem to be saying that tax cuts aren’t doing what they’re supposed to do, but you also seem to be saying that the problem is that spending wasn’t cut. Those are two different things, you know. As far as I can tell, the tax cuts are working. Regarding the lack of spending cuts, that’s exactly what I’m talking about when complaining about today’s Republicans.

  4. Don’t forget, though, that the US national debt is shrinking in terms of %age of GDP. Increasing GDP is just as good a way of reducing debt as reducing spending. The fact is, the absolute value of a debt is irrelevant – a debt of $1m to a rich man is relatively little, a debt of $1m to a poor man is crippling. So, if you can use your debt to become richer faster, it’s worth having. In other words ‘you have to spend money to make money’. There are elegant arguments that suggest that being somewhat in debt, as a country, is better than trying to be neutral. You miss out on opportunities you might otherwise have if you try to avoid getting into debt. Now I’m 100% for cutting spending, because I want to see tax cuts, and because I don’t like the gov’t messing with a free market economy. But I don’t think reducing debt is a convincing argument to cut spending. It just doesn’t have any substantial benefit other than a psychological one for certain people.

  5. I lean toward slight spending reductions, huge waste reductions, and growing the economy to erase the debt over time. All that aside, tax cuts for tax cuts’ sake are good enough for me…

  6. Vincente (and Senator Schmuck: We are on the wrong side of the Laffer Curve, that’s why tax cuts always result in economic growth and higher tax revenue. Right now, my wife and I are looking to lower our income and move to a lower cost state to avoid taxes. The AMT is absolutely crushing middle class people in expensive, high tax places like New Jersey.

  7. Murdoc is right. Supply-side economics is not dead and always works when tried. The problem is that Republican politicians today are friggin selfish! They go to DC with the good intention of shrinking government, and change their mind, all for self-serving reasons. We need a new great conservative like Reagan, and Bush certainly isn’t that man. Bram, you can head in any direction except northeast and you will save a bundle! I left NJ for roughly equal pay in Louisiana and I went from poor to rich in one day!

  8. M, You are indeed correct. Tax Cuts with no cut in federal spending limits their effectiveness. Sure, tax cuts are great for the economy, but when the federal government is gobbling up dollars like it was 1968, it doesn’t take a genius to see that is a problem. Which is why the Rs got slapped – they got away from their ‘core competencies.’ Nicholas: ‘You miss out on opportunities you might otherwise have if you try to avoid getting into debt…’ Um, like being a wholly owned subsidiary of the People’s Republic of China? Thanks, I’ll pass. V PS- M, why has there been almost no news about the fact that an F-16 went down outside Baghdad earlier this week, and the pilot is still listed as ‘duty status unknown’? There is talk that a shoulder-fired Strela SAM took it down… which, if true, is not good at all.

  9. Vincente, if China lends the US money, then the US can spend it and China can’t. For example the US could invest it in a company which grows and makes lots of money. They they can pay back the original loan, plus interest, and still have money at the end. Of course in reality the US gov’t is not exactly investing it in a company. But they are investing it in the economy as a whole. And as long as the economy grows faster than the interest rate, borrowing that money is a net benefit for the US and a lost opportunity for China. China only gains the interest. The US could get much more than that, if it’s used wisely. Of course, if it’s used to build a ‘bridge to nowhere’, the US doesn’t get much benefit at all. Which is why pork is stupid. But borrowing money for a good purpose is not.

  10. Vincente, The Federal borrowing went way up after 9-11. Between homeland defense and military spending increases, and the deepened recession caused by 9-11, this was inevitable. During times of crisis, deficit spending is appropriate. Yes, the Republicans went overboard on pork barrel spending in the ensuing years and they paid the price. While I am all in favor of cutting spending on social programs, I disagree that large spending cuts are required to pay for tax cuts. I believe that we are still ‘over the hump’ of the Laffer Curve and that tax cuts will increase tax revenues. That has certainly happened over the past 4 years just as it did during the 1980’s. http://en.wikipedia.org/wiki/Laffer_curve Democrats don’t really try to argue this point. The want high taxes for ideological reasons and as a way to exert more control over the economy and our behavior.