I started all this number crunching to look at the reality of the Republican Talking Point that the Democrats are a "tax and spend" political party. It is only a Talking Point, unless you’re filthy rich. FDR’s graduated Tax Schedule did sock it to the rich, but the person who revised it was Johnson, not any of the pre-Reagan Republicans. In the process of running all that down, I got interested in Reagan’s tax cuts themselves. As I documented in the last post, it was massive, aimed at relieving taxes for the wealthy, and doubled the take home pay of the top end of the income spectrum.
I’ve always wondered how he made such a cut without considering the impact on the national budget. He cut taxes seemingly independent of the consequences, and the national debt climbed precipitously.I also wondered how he could justify massive peacetime military spending, when he was also dropping revenues. Here’s the data expressed as % of the GDP [national defense spending in green]:
The national defense line has a generous bump during the Reagan/BushI years and shows the huge deficit. But maybe I’m being to hard on him. Maybe he planned better than I thought, but the national defense spending got out of hand. So I decided to look at what might have happened if he had kept military spending at the rates for Carter and later Clinton. This next graph is exactly like the last one except I changed his national defense spending to gradually move between the two Democrats, and the surplus/deficit line reflects the different level of military spending.
As you can see, it decreases his deficit to hold his defense spending down, but the deficit doesn’t go away. So he not only cut taxes without regard to consequences, he also massively increased military spending.
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