Vail Valley Voices: Reagan still right
May 5, 2012
The Rev. Jack Van Ens misunderstands economics in general and Reaganomics in particular, the constitutionally assigned role of government, and the results of President Reagan’s policies.
Instead of relying on facts, figures, actual history and results, Van Ens resorts to parroting the divisive rhetoric of the left, citing primary campaign slogans and political prognostications decorated in his own sensationalistic language as he casts judgment from his bully pulpit. It makes one wonder if his sermons are as politically biased and just as wrong.
Rebuttals to his arguments are plentiful. I’ll begin by defending the late President Ronald Reagan against Reverend Jack’s attacks.
Reagan said a great many quotable things that were correct then and still hold true today, whereas every economist the reverend may quote has many detractors and opposing opinions.
An economist is someone who knows more about money than the people who have it, or as Will Rogers said, “An economist’s guess is liable to be as good as anybody else’s.”
One of Reagan’s “simpler themes” for which Van Ens expressed a general disdain was that “we should measure welfare’s success by how many people leave welfare, not by how many are added.” The truth of such simple Reaganesque themes is easy to grasp. Perhaps they’re not so simple after all, just concise.
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Calvin Coolidge was less concise in his themes: “No matter what anyone may say about making the rich and corporations pay taxes, in the end, they come out of the people who toil … Collecting more taxes than is absolutely necessary is legalized robbery.”
Reagan cut taxes for everyone. He cut government spending and immediately reduced the size of government by 5 percent, something the current administration is loath to even consider.
Reagan reversed the disastrous economic policies of Jimmy Carter, who gave us 10.8 percent unemployment, a 21.5 percent prime interest rate, skyrocketing poverty and gasoline rationing, an impoverished economic malaise emblematic of Soviet bloc countries.
Reagan saved us from Carter’s liberal policies and restored economic growth by reducing the top income tax rate of 70 percent down to 50 percent, and provided a 25 percent across-the-board reduction in income tax rates for everyone. The 1986 tax reform further reduced and simplified taxes, leaving just two rates, 28 percent and 15
Even with the defense buildup, which won the Cold War and brought down the Berlin Wall without firing a shot, total federal spending declined under Reagan from a high of 23.5 percent of GDP in 1983 to 21.3 percent in 1988 and 21.2 percent in 1989 – a real reduction in the size of government relative to the economy of 10 percent.
The great recession that began in 2007 was caused not by a Reaganomics redux, but by the mortgage meltdown fueled by the inevitable failure of ill-conceived and overreaching government policies such as the Community Reinvestment Act and congressional mandates forcing banks and lenders to assume irrational risk by giving money to people with no credit and bad credit.
As Reagan said, “Government does not solve problems. It subsidizes them.”
These feel-good policies pandered to liberal constituents naive enough to believe in free lunches and fairy tales. Reagan observed, “Government is never more dangerous than when our desire to have it help us blinds us to its great power to harm us.”
In a roundabout way, Van Ens’ commentary asks, “What would Jesus do?” His entire argument is framed as a plea for endless government charity, but never once did Jesus claim charity was an obligation of the government but rather of the individual.
Reverend Jack should refer to the wisdom of Adrian Rogers’ sermon, “What one person receives without working for another person must work for without receiving.” A non-theist should not have to be the one to explain this.
Government is not a charity, and spending other people’s money is not philanthropy.
Real contributions are voluntary, whereas government-mandated confiscation and wealth redistribution through taxation is nothing less than theft – an unconstitutional violation of every citizen’s right to life, liberty and property.
“Mandatory contribution” is a contradiction in terms, and as Reagan explained: “The size of the federal budget is not an appropriate barometer of social conscience or charitable concern.”
From Reverend Jack’s many commentaries, one is forced to sadly conclude that he prefers the philosophy of Marx over Madison, which prompts another of Reagan’s quotes to mind: “How do you tell a communist? Well, it’s someone who reads Marx and Lenin. And how do you tell an anti-communist? It’s someone who understands Marx and Lenin.”
The brilliant economist Thomas Sowell observed that “most people who read ‘The Communist Manifesto’ probably have no idea that it was written by a couple of young men who had never worked a day in their lives and who nevertheless spoke boldly in the name of ‘the workers.'”
Sowell also asks: “Do people understand that the world toward which the Obama administration is leading us is a world where individuals’ economic well-being is no longer determined by how much their goods and services are valued by those paying for them but by politicians in Washington? The counterproductive economic consequences of this are dwarfed by the harm done by making us all dependents and supplicants of ‘public servants,’ who become in reality public masters.”
Nobel Prize-winning economist Milton Friedman was also skilled at simplifying themes such as this: “If you pay people not to work and tax them when they do, don’t be surprised if you get unemployment.” Or as Reagan said, “I think the best possible social program is a job.”
Thomas Sowell expanded on Friedman’s theme: “Politicians often act as if you can create costs without creating consequences. Force insurance companies to cover more things, and then act surprised when the premiums go up. Mandate more benefits for employers to provide for their employees, and then act surprised when they don’t hire as many workers. It is great political theater but lousy economic policy.”
We should all be reminded of the wisdom of our 40th president, who famously said: “The nine most terrifying words in the English language are, ‘I’m from the government and I’m here to help.'”
These themes are not new, nor are they uniquely American. French economist Frederic Bastiat (1801-50) correctly observed: “Government is the great fiction, through which everybody endeavors to live at the expense of everybody else. … Everyone wants to live at the expense of the state. They forget that the state lives at the expense of everyone.”
Adrian Rogers must have borrowed this from Bastiat: “For, remember, that law is force, and that consequently the domain of the law cannot lawfully extend beyond the domain of force.”
And: “Nothing can enter the public treasury in favor of one citizen or class but what other citizens or other classes have been forced to send to it.”
As Reagan said, “There’s a clear cause and effect here that is as neat and predictable as a law of physics: As government expands, liberty
Economists have condemned the policies of Van Ens’ idol, Franklin D. Roosevelt, for prolonging the Great Depression. Everyone should memorize the words of FDR’s treasury secretary, Henry Morganthau, who said, “We have tried spending money. We are spending more than we have ever spent before, and it does not work. And I have just one interest, and if I am wrong … somebody else can have my job. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises. … I say after eight years of this administration, we have just as much unemployment as when we started … and an enormous debt to boot!”
Reread the above paragraph until it sinks in and remember that in 2009, Obama told Matt Laurer, “I will be held accountable.” Echoing Morganthau, Obama suggested that if he cannot fix the economy in three years, someone else can have his job.
We must hold this failed president to his promise.
Many Americans complained vociferously about the Reagan and Bush deficits, decrying deficit spending at 4 percent of GDP. Congressional Budget Office estimates for 2012 now put us over 23 percent.
Ah, the good old days!
Buddy Shipley is an Edwards resident.