Paul Mack recently wrote a compelling letter about deficit spending. His letter provoked memories of federal deficits over the decades. Ronald Reagan’s budgets broke records for borrowing and spending. George Bush (the 1st) tried to reduce the deficit by raising taxes, and immediately got shown the door. Bill Clinton produced a budget that created a surplus, and the Republicans promptly tried to squander it with a tax cut proposal. I remember a House committee questioning Fed chair Alan Greenspan, asking him what to do with the surplus. He advised them to pay down the debt. They replied that that was politically unfeasible; isn’t the best thing to cut taxes? He said to pay down the debt. After several rounds of this they finally convinced him that they were never going to pay down the debt, and he said, “I guess if you won’t pay down the debt, the next best thing is to cut taxes.” The headline in the Wall Street Journal read, “Greenspan says cut taxes.”
So much for GOP concern for the deficit.
When George W. Bush (the 2nd) offered a budget that topped any of Reagan’s, a reporter asked the vice-president, Dick Cheney, how they could do that. He growled into the camera, “Deficits don’t matter.” That phrase became a Republican mantra. “Deficits don’t matter” became the buckler the GOP presented to every criticism.
When Barack Obama presented a deficit budget, the GOP acted like pigeons with a hawk in the air, screaming about the deficit.
This confused me, so I asked a Republican friend about it. He is a stockbroker, so presumably knows about such matters. He replied, “Democratic deficits are out of control.” I found that provocative. I thought about it. Democratic deficits are no larger than Republican deficits, so what makes them “out of control”?
The only difference I could come up with is who gets the money.
GOP deficit funds go into the pockets of big business through tax breaks, outright subsidies (oil depletion allowances, for example), and federal contracts, or into the pockets of the very rich through tax cuts, special tax rates on income from investments, and other more arcane things.
Democratic deficit funds, at least in part, go to ordinary people, even poor people, usually through federal programs.
What could be more out of control than that?
Bill Gillmore
Columbus
Peter Imes is publisher of The Dispatch. You can email him at [email protected].
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