Posted on 05/05/2002 3:49:39 PM PDT by jimkress
President Reagan entered the White House with an attitude of working honest deals with the Congress on spending. He wanted more defense spending, lower entitlement spending, lower tax rates which would boost the economy (and thus revenues) and seemed to achieve that agreement with Congress in both 1981 and 1982. However, despite getting concessions on taxes, congress never once cut spending, and the actual budgets were higher than what Reagan asked for 7 out of 8 years. This attitude of "cut spending later" helped continue the debt trends that began under Ford and Carter. By the end of Reagans terms, debt had increased by $2 trillion.
We've all heard the myth: President Reagan asked for far more spending than congress wanted and/or congress actually spent less than what Reagan asked for...yet the truth once again tells a different story.
| Federal Budget Outlays Proposed (Reagan) and Actual (Congress) and Cumulative Percent Difference (billions of dollars) |
||||
|---|---|---|---|---|
| Fiscal Year | Outlays | Cumulative Differences |
||
| Proposed | Actual | % Difference | ||
| 1982 | 695.3 | 745.8 | 7.3 | 0.0 |
| 1983 | 773.3 | 808.4 | 4.5 | 12.1 |
| 1984 | 862.5 | 851.8 | -1.2 | 10.8 |
| 1985 | 940.3 | 946.4 | 0.7 | 11.6 |
| 1986 | 973.7 | 990.3 | 1.7 | 13.5 |
| 1987 | 994.0 | 1003.9 | 1.0 | 14.6 |
| 1988 | 1024.3 | 1064.1 | 3.9 | 19.1 |
| 1989 | 1094.2 | 1144.2 | 4.6 | 24.5 |
| Totals | 7,357.6 | 7,554.9 | Avg 2.8 | Avg 3.1 |
So there you have it. On average, Congress spent 2.8% more than Reagan asked for, while the cumulative (yearly compounding rate) was a whopping 24.5% more. If the budget in 1989 had been 24.5% smaller (i.e., 280 billion dollars) there could have been a surplus of about 130 billion dollars instead of a deficit. This is equivalent to a constant compounding increase of 2.8% every year during the 8 budgets above and beyond the previous year's spending. Whomever thinks that is not a significant amount should ask themselves whether a balanced budget in 1989 would have been significant.
If the cumulative column is not clear, visualize it as the acceleration of spending beyond what Reagan asked for. A 10% increase each year beyond what he asked for, for example, compounds to 1.1^7, or 1.95, which is 95% more, as opposed to 1 + 0.1*7 = 1.7, or 70% that some would say is the correct figure. In other words, each increase carries with it the excess spending from the previous year(s). It's also the same kind of math that causes programs with mandatory spending increases, no matter how small, to balloon after a few years. It's called geometric progression. For a nice graph of such a function, look at the growth in U.S. debt since 1974.
See a visual representation of the differences in spending.
The rightmost column in the table is completely meaningless: there is no compounding here. If you were to look at cumulative values, build running totals as below:
| Annual: | Cummulative: | |||||||
| Proposed | Actual | % Difference | % Difference | |||||
| 1982 | 695.3 | 745.8 | 7.3% | 695.3 | 745.8 | 7.3% | ||
| 1983 | 773.3 | 808.4 | 4.5% | 1,468.6 | 1,554.2 | 5.8% | ||
| 1984 | 862.5 | 851.8 | -1.2% | 2,331.1 | 2,406.0 | 3.2% | ||
| 1985 | 940.3 | 946.4 | 0.6% | 3,271.4 | 3,352.4 | 2.5% | ||
| 1986 | 973.7 | 990.3 | 1.7% | 4,245.1 | 4,342.7 | 2.3% | ||
| 1987 | 994.0 | 1,003.9 | 1.0% | 5,239.1 | 5,346.6 | 2.1% | ||
| 1988 | 1,024.3 | 1,064.1 | 3.9% | 6,263.4 | 6,410.7 | 2.4% | ||
| 1989 | 1,094.2 | 1,144.2 | 4.6% | 7,357.6 | 7,554.9 | 2.7% | ||
Nothing to talk about.
You're right -- a mere $197,300,000,000. A mere $197,300,000,000 that was borrowed and remains unpaid. One could argue that the interest payments on that debt were borrowed also and (given the rule of 72s and a 6% interest rate) the debt would now be about twice that amount -- about $400,000,000,000.
Yes, Congress consistantly appropriated more than what was asked for.
But if more was appropriated in one year than what was asked for, why wasn't LESS requested the following year? If you follow the trend, it looks like they kept on trying to outbid each other, like in a poker game.
Nobody EVER came out and actually proposed a DECREASE.
I can still recall the bullcrap rhetoric that was fed to the taxpayers from both factions of the Republicrat Party:
"We decreased the rate of increase"
What a crock o' $hit!!!
You're right -- a mere $197,300,000,000. That, too, is an altogether different issue. The article perported to show that, had Reagan gotted what he had wanted, things would have been different. The sum you wrote out is significant, but not in terms of policy: a change of 2-3% is not a drastically different policy.
A mere $197,300,000,000 that was borrowed and remains unpaid. How do you know that is is that very portion that remains unpaid? This difference may well have been financed with 10-year bonds (or shorter), which are paid up.
You are absolutely right. I didn't mean to denigrate your post and probably should not post "tongue-in-cheek" replies without the appropriate labels.
The sad fact is that the budget shenanigans and debt problems we've amassed over the last 30 years are subject to much rhetoric and distortion -- on both sides. We'll be slaving a long time to pay the debt.
"cut spending later"
What is an 'Oxymoron'?
Thanks to President Reagan the Cold War ended without total annihilation and the Russians are now our allies. And with all that, the American spirit soared again with the Gipper's optimism after the malaise of the Carter years.
Yep a huge amount. It is 4 times the amount of cash Bill Gates has in the bank or in liquid assets.
It is peanuts.
Reagan never worried about the debt. He knew that he could cut taxes and keep them cut, they would have to curb spending.
There are two ways to curb government growth. The first is to cut governemnt spending. The second is to cut governemnt revenue. Cuting the revenue worked. Cuting spending an apaying off the debt does not.
We are now nearly 35 years with out any new big government programs. Every Democrat believed in 1980 that would be only a few short years until socialized health care would be law. Bill And Hillary believed it.
If Reagan had cut both spending and taxes, Clinton would have had the bucks to get socialized medicine passed. What stopped it was there was not enough money in the till to fund it. You could now be taking a number and waiting for weeks for a Doctors appoinment for a heart attack.
We would now be talking about government run mass transit with cars and fuel severely rationed and people haveing to travel on governemet transportation. You would have to show your national Id to travel on government trasportation of course.
People do not lose their freedom from a national debt, They lose their freedom when there are the funds to start socializing the economy. A governemnt surplus and a Clinton type in the White House will get you socialism in a heart beat.
If you want to stay free, you had best hope for big deficits. Both Hitler and Stalin balanced the budgets... You no doubt would have been a big fan of both.
You are one sick puppy.
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