Many in the GOP are calling for a return to the era of Reagan’s fiscal conservatism, but do they have the right man? Rush Limbaugh and Sean Hannity constantly tout themselves as “Reagan conservatives”, and in the 2007-2008 primaries, the GOP presidential candidates frequently mentioned Reagan as the champion of conservatism. Many Tea Party adherents mention Reagan as the paragon of fiscal conservatism, and Sarah Palin, a top figure in the Tea Party movement, prolifically touted Reagan’s fiscally conservative record in her recent book, Going Rogue. In California, both the 2010 gubernatorial and U.S. Senate races have already witnessed references to President and former California governor, Ronald Reagan. But, upon closer examination, should Ronald Reagan be characterized as the icon of fiscal conservatism?
A 1996 study conducted by the libertarian think tank, The Cato Institute, detailed President Reagan’s fiscal legacy. Here are the pertinent highlights:
GDP growth averaged 3.2% during the Reagan years, as opposed to 2.8% during the Ford-Carter years and 2.1% during the Bush I-Clinton era.
Real median family income rose by $4,000 under Reagan, while remaining static pre-Reagan and falling by $1,500 post-Reagan.
After inheriting rampant inflation and a severe recession, inflation and unemployment returned to healthy levels during Reagan’s tenure.
The US stock market rose by 14%.
This is the good news, but the next points paint a different picture.
In conjunction with a largely Republican Senate and a Democratic House, budget deficits ranged between $101-$236 billion annually, compared to $40-$74 billion annually under Carter.
Under Reagan, the national debt more than doubled, from $1 trillion to a little over $2 trillion, in real terms.
Federal spending, domestic and military, increased by 22% in real terms, with military spending accounting for the largest percentage.
The U.S. Dollar lost about 6% of its value.
Looking back, Reagan’s tax cuts laid the foundation for impressive growth, higher incomes, and a rising stock market, but his big spending created large deficits, increased the national debt by more than $1 trillion, and devalued the U.S. Dollar. And although Reagan was a vocal and articulate champion of limited government, the Federal Government actually grew in scope and size under his leadership.
As a fractured GOP and rising Tea Party movement rail against Obama’s big spending, gargantuan deficits, skyrocketing debt, and Dollar devaluation, it would behoove them to recall that even one of their own treasured icons committed many of the same mistakes back in the 1980s. Reagan himself called the explosion in national debt his “greatest disappointment”.
Instead of President Reagan, perhaps the GOP and Tea Party activists should consider President and Five Star General Dwight D. Eisenhower. After all, Eisenhower was the last Republican President to balance the budget, and he did so with a Democratic Congress. In two of his eight years, Eisenhower actually payed down the national debt. Ironically, Eisenhower expanded domestic spending on a few fronts, such as highway infrastructure, social security, and unemployment insurance, but he ended US involvement in the open-ended Korean War and made a number of other cuts in the military budget. With a more stringent budget, Eisenhower was also able to tame the inflation brought about by the 1950-1953 conflict on the Korean peninsula. Finally, the stock market rose by 15% during his presidency.
The Reagan-Eisenhower dichotomy serves as a valuable lesson for independent-minded voters across the political spectrum. Don’t allow people to think for you, think for yourself. Don’t just blindly accept the word of talk show hosts, network personalities, and party elites as gospel truth. Put their claims to the test. Study, dig below the surface, ask the hard questions, and come to your own conclusions.