the humble libertarian

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Friday, November 20, 2009

Ronald Reagan's Greatest Disappointment

By: Ryan Jaroncyk, THL Contributor

Since 2007, the GOP has been prolifically citing President Ronald Reagan as its primary source of inspiration.

In 2007-2008, the presidential candidates mentioned Reagan a dizzying number of times in the debates, and popular conservative commentators such as Rush Limbaugh and Sean Hannity frequently appeal to him as the standard bearer of the Republican Party.

Reagan is viewed as the epitome of conservatism, a man whose tax cuts produced a veritable economic boom in the 1980s, whose foreign policy defeated the mighty Soviets, and whose philosophy of limited government, individual responsibility, and traditional family values shaped a nation.

While Reagan's reputation is unmatched in the conservative community, perhaps we should take a closer look at what he himself called his "greatest disappointment." For even great men make mistakes.

According to a Cato Institute analysis back in 1996, Reagan's fiscal policies generated a significant number of positive developments. GDP growth averaged 3.2% during his tenure, compared to 2.8% during the Ford-Carter years and 2.1% during the Bush I-Clinton years.

Real median family income rose by $4,000 during the Reagan years, while it remained static pre-Reagan, and fell by almost $1,500 post-Reagan. Interest rates, inflation, and unemployment fell faster under President Reagan than they did immediately before or immediately after his presidency.

Finally, the stock market rose by about 14% under his tenure. That's the good news. Now, here's the bad news.

Under Reagan, and a largely Republican Senate and Democratic House, budget deficits and national debt skyrocketed. During his presidency, the budget deficit ranged anywhere from $101 to $236 billion. Compare this with President Jimmy Carter, whose deficits ranged between $40-$74 billion.

On Reagan's watch, the national debt more than doubled, from about $1 trillion to a little over $2 trillion, in real terms. Federal spending grew by 22% in real terms, with military spending accounting for most of the increase. And finally, the US Dollar lost about 6% of its value.

So, as "conservatives" channel the Great Communicator as a catalyst for a GOP rebirth, perhaps they should reconsider. Does the GOP need another leader who increases federal spending, runs huge deficits, adds trillions to the national debt, and devalues the Dollar?

Didn't the GOP just go this route with George W. Bush? Bush, like Reagan, was a champion of tax cuts and limited government, yet he increased federal spending, ran huge deficits, added trillions to the national debt, and devalued the Dollar.

Perhaps the GOP needs to take a fresh approach as it chooses its next leader. How about a leader (or leaders) who champions tax cuts and limited government, AND reduces federal spending, balances the budget, lowers the debt, and increases the value of the Dollar?

How about a leader who can defend America without growing the size of government and exploding the size of the military budget? If the GOP is going to rail against Obama's excessive spending, deficits, debt, and Dollar devaluation, then how can it unreservedly fawn over a past icon who committed many of the same fiscal mistakes?

Is it because Reagan's spending, deficits, debt, and Dollar devaluation were merely less egregious than Obama's? Until the standard is raised, and until this contradiction is addressed in an honest manner, the GOP will continue to suffer a credibility problem on fiscal matters.

Perhaps the time has come for the GOP to seek a new brand of leadership that can build on Reagan's strengths and rectify his weaknesses. After all, even Reagan acknowledged that the increase in the national debt was his "greatest disappointment."