This is floating around the Internet and I heard Lanny Davis on Hannity say that “Reagan raised taxes” as a reason that the economy recovered after
Obama Carter but to make that statement ignores a lot of stubborn facts, one major fact is that for every $1 of tax increases the Democrats agreed to $3 in spending cuts – I’ll let you guess which promise was kept and in the current debate who we should trust.
Ann Coulter noted this in November of 2011:
Amazingly, Blitzer cited Ronald Reagan’s statement in his autobiography, “An American Life,” that he would happily compromise with Democrats if he could get 75 or 80 percent of what he wanted — implying that today’s Republicans were nuttier than Reagan if they’d refuse a dollar in tax hikes for $10 in spending cuts.
Wolf should have kept reading. As Reagan explains a little farther in his autobiography: He did accept tax hikes “in return for [the Democrats’] agreement to cut spending by $280 billion,” but, Reagan continues, “the Democrats reneged on their pledge and we never got those cuts.”
Maybe that’s why Republicans won’t agree to raise taxes in exchange for Democratic promises to cut spending.
Lest they have forgotten, here’s a refresher – gleaned from the historic tables in the back of Clinton’s own recent “Economic Report” to Congress:
Fact: Interest rates eased after Reagan slashed tax rates.
The long-bond yield was 13.45 percent in 1981. By the time Reagan left office in 1989, it had dropped to 8.45 percent. Mortgage rates fell from 14.70 percent to 10.13 percent over the same period.
Fact: Inflation cooled.
In the year before Reagan’s tax cuts took effect, the annual rate of consumer inflation was 13.5 percent. In the first year of his tax cut, 1981, inflation was 10.3 percent. In the second year, it was 6.2 percent. By the third and final year, 1983, inflation had dropped to 3.2 percent. When Reagan left office, inflation stood at a tame 4.8 percent.
Fact: The economy reached full employment.
Before Reagan’s full tax-relief package took effect, the jobless rate hit 9.6 percent. But as tax cuts worked their magic in the economy, unemployment dropped every year after 1983, reaching a low of 5.3 percent in 1989.
Tax cuts benefited minorities, too. The jobless rate among blacks plunged from 19.5 percent in 1983 to 11.4 percent in 1989.
Fact: Government revenues nearly doubled after Reagan’s sweeping tax cuts.
Before his 25 percent across-the-board cut in individual income-tax rates went into effect, government receipts from individual income taxes trickled in at $244.1 billion. The year Reagan left office, they totaled $445.7 billion — an 82 percent jump.
In the tax-hiking, supposedly “fiscally responsible” ’90s, by comparison, individual tax receipts rose a comparable 86 percent.
More key, individual tax receipts grew at a compound annual rate of 6.9 percent from 1980 to 1989 (compared with a 7.1 percent rate from 1990 to 1999).
Meanwhile, however, federal outlays grew at a faster 7.6 percent compound annual clip from 1980 to 1989, causing the yawning budget gaps.
The problem, you see, was spending, not tax cuts — a distinction the intellectually dishonest
redistributionists on the left fail to make when they cluck about the skyrocketing deficits and mounting debt under Reagan.
And for that, Democrats share the blame.
Yes, Reagan ballooned defense spending. But Democrats, who controlled appropriations back then, refused to give him the corresponding cuts in other domestic programs — and instead increased spending.
In fact, the Democrat Congress outspent every one of the nine budgets Reagan proposed, but one.
It really has come to the point that nothing a Democrat says can be trusted. They are exemplified in the famous quote that author Mary McCarthy issued live on the Dick Cavett show about left wing playwright, Lillian Hellman, in 1979:
Every word she writes is a lie, including and and the.