Making Reaganism Relevant

I have written before that instead of asking whether some aspiring political leader is “the next Ronald Reagan,” conservatives, small-government libertarians, and Republicans in general should demand an original leader who is well-equipped to take on current challenges. Ramesh Ponnuru argues—quite properly—that in addition, Reagan’s entire philosophy of government has to be updated to address present day issues:

When Reagan cut rates for everyone, the top tax rate was 70 percent and the income tax was the biggest tax most people paid. Now neither of those things is true: For most of the last decade the top rate has been 35 percent, and the payroll tax is larger than the income tax for most people. Yet Republicans have treated the income tax as the same impediment to economic growth and middle-class millstone that it was in Reagan’s day. House Republicans have repeatedly voted to bring the top rate down still further, to 25 percent.

A Republican Party attentive to today’s problems rather than yesterday’s would work to lighten the burden of the payroll tax, not just the income tax. An expanded child tax credit that offset the burden of both taxes would be the kind of broad-based middle-class tax relief that Reagan delivered. Republicans should make room for this idea in their budgets, even if it means giving up on the idea of a 25 percent top tax rate.

When Reagan took office, he could have confidence in John F. Kennedy’s conviction that a rising tide would lift all boats. In more recent years, though, economic growth hasn’t always raised wages for most people. The rising cost of health insurance has eaten up raises. Controlling the cost of health care has to be a bigger part of the Republican agenda now that it’s a bigger portion of the economy. An important first step would be to change the existing tax break for health insurance so that people would be able to pocket the savings if they chose cheaper plans.

Conservative views of monetary policy are also stuck in the late 1970s. From 1979 to 1981, inflation hit double digits three years in a row. Tighter money was the answer. To judge from the rhetoric of most Republican politicians, you would think we were again suffering from galloping inflation. The average annual inflation rate over the last five years has been just 2 percent. You would have to go back a long time to find the last period of similarly low inflation. Today nominal spending — the total amount of dollars circulating in the economy both for consumption and investment — has fallen well below its path before the financial crisis and the recession. That’s the reverse of the pattern of the late 1970s.

I would add that it should still be possible to have a flatter, lower overall tax system, with the top rate close to 25%, but like Ponnuru, I am surprised that more Republicans haven’t gotten on the bandwagon to lower the payroll tax. I have argued for them to do so in the past. It would be a great way for Republicans to start to win back middle class voters, and it would be very good policy to boot.

Some Facts about Sequestration that the New York Times Fails to Understand

Sequestration, by the Times’s own admission, “will not stop to contemplate whether [the programs it cuts] are the right programs to cut; it is entirely indiscriminate, slashing programs whether they are bloated or essential.” And yet, the Times pretends throughout its unsigned editorial—I wouldn’t want to put my name on it either—that sequestration represents the only pathway by which center-right policymakers want to shrink government, or at least reduce the growth of government.

This, of course, is a silly argument, but one that has great sway in the epistemically closed world in which the Times finds its most ardent fans. Few, if any small-government libertarians and conservatives would propose to shrink government in the manner that sequestration calls for; they would by contrast be more than willing to reduce government “substantially, but thoughtfully, considering the nation’s needs” via regular order as contemplated by the traditional appropriations process. The problem, however, is that it has been nearly four years(!) since Senate Democrats passed a budget—we have been operating on continuing resolutions since then—and there is no Fiscal Grand Bargain in the offing, especially not with a White House that signaled its intention very early after the November elections to make war with Republicans during the president’s second term, and which doubled and tripled down on those intentions in the inaugural and State of the Union addresses. Because the parties don’t appear to be in a mood to deal, and because any further delay in getting our fiscal house in order might further jeopardize our credit rating, we have the sequester to force matters along. Either the parties get their respective acts together, or we get the meat cleaver.

Am I happy about the sequester? Of course not; it’s a dumb way to grapple with fiscal issues. But instruments like the sequester get designed and implemented because national leaders too often become shirkers of responsibility. If elected officials stepped up and did their jobs, we might have nice(r) things.

Would it be too much to ask that the Times remember all of this? Would it be too much to ask that it refrain from implying—and the Times does more than imply—that sequestration has come about because too many representatives and senators have worn out their copies of The Conscience of a Conservative and their DVDs of Ronald Reagan’s first inaugural? Would it be too much to ask that the Times recall in its editorials that Democrats joined Republicans in implementing the sequestration mechanism to force themselves and each other to act And while I am asking questions, would it be too much to ask that the Times remember which president signed the sequester into law? Here’s a hint; he’s the current Democrat-in-Chief.

Some might wonder why I bother asking these questions. After all, the irresponsibility of elected officials is not the only reason why we can’t have nice(r) things. Journalists aren’t exactly setting records these days either.

(Nota bene: Not being the New York Times, I have no problems with my name being associated with this blog post.)