Read more about the article De-heroification … dispelling some Reagan myths

De-heroification … dispelling some Reagan myths

Now that the hoopla of February's first weekend has faded, let’s hope the deification process fades as well. It must have been such a downer for the Reaganites and their 100th birthday celebrations to have to compete with the NFL and the most watched Super Bowl ever…the gall to schedule such an event on the holiest of days! Amidst all the reminiscing and nostalgia, I did happen to see a few articles not as admiring, such as Michael Kinsley's on Slate. I like this part:

In the economic sphere (discussed in last week's column), the Reagan hagiographers give him credit for things he intended that never happened, such as smaller government. On the world stage, they credit him for things he never intended that did happen.
I'm not going to get into the myriad of philosophical elements of Reagan's legacy on what he did and didn't do and what gets attributed correctly or not. I don't have the time, or the inclination, and there are a host of Gipper love books and a couple like Will Bunch's Tear Down This Myth: How the Reagan Legacy Has Distorted Our Politics and Haunts Our Future for your reading pleasure. It's human nature to see things from one's too often myopic viewpoint and human nature to remember things they way we want, to the point of manufacturing memories that just aren't true. Such is the case with Reagan and that nostalgia. Longing for the days that never were. And the political right and its Murdoch media arm are very good at enhancing the myth that is the goal of the Reagan Legacy Project, "recalling" those good old days of Reagan. Truth or not, there are several topics that are now commonly tied to Reagan's legacy; myths of smaller government, lower taxes, less spending. And most people have no idea how much the debt and deficit grew under Reagan. The military has a nice term known as BLUF - which stands for Bottom Line Up Front. This is going to get tedious, so I'll cut to the chase:
In raw numbers not adjusted for inflation, Reagan increased federal spending by $466B (69%) over what he inherited, averaged a %177B deficit (+180%), added $1.40 trillion to the debt (+178%), enjoyed a pretty substantial increase in the GDP (+77%), but increased the debt to GDP ratio by 15%. Even adjusted to a FY2005 baseline to account for inflation, Reagan still increased federal spending by 22%, averaged a deficit that was 99% more than Carter's average, increased the public debt by 100%, and as the adjusted GDP increase was only 28%, that 15% increase in debt to GDP was a lot more substantial. Reagan added 13,000 non-defense federal employees - the IRS grew despite his wishes. (Clinton decreased the non-defense federal workforce by 99,000.)
I'll deal with each piece individually, but that's it in a nutshell. If you want to know more and how I determined this, read on...

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Time to stop scoffing at those who worry about the budget deficit

How bad is the U.S. budget deficit? It's so bad that I've lost sleep over it during the past year, even though the extent of the deficit rarely makes any local news. Here's how Brett Arends of the Wall Street Journal summarizes the situation:

The federal government is expected to borrow $1.6 trillion this year, or about $15,000 for every household in the country. Over the next 10 years it's expected to borrow a total of $8.5 trillion. And the government was already deeply in debt to begin with. . . Remarkably, the Treasury market has not yet panicked about the deficits: Yields have barely risen this week. Embedded in the market is a long-term inflation forecast of about 2.5 percent. I call that a dangerous complacency.
After giving the bad news, Arends gives some advice on how to protect your savings, though he doesn't sound optimistic.

Continue ReadingTime to stop scoffing at those who worry about the budget deficit

It’s time to start paying as we go

I would think that the economic collapse of the United States has clearly demonstrated that the "free market" is not benevolent when those holding great power in society are not benevolent. Consequently, the best way to run society is to use government to make sure that powerful interests don't run roughshod over regular folks. But what are the proper functions of government, to the extent that government works with markets to allocate goods and services? This question was addressed by economist Jeffrey Sachs in the May 2009 edition of Scientific American:

The reasons include the protection of the poor through a social safety net; the correction of externalities such as greenhouse gas emissions; the provision of "merit goods" such as healthcare and education that society deems to be essential for all its members; and the financing of scientific and technological research that cannot be efficiently captured by private investors. In all these circumstances, the free market system tends to under-provide the resource in question.

Sachs ends his article by indicating that there is no alternative to raising taxes to pay for the services Americans want and need. In particular, this year's deficit "will reach an astounding 1.7 5 trillion, or 12% of GDP." Further, the government debt held by the public will rise from 40% of GDP in 2008 to 65% of GDP in 2013. According to Sachs, this continued buildup of public debt "will threaten the well-being of our children and our children's children."

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How much money have we spent to fight the so-called “war” in Iraq?

A new Salon.com book review gives us the depressing and infuriating answers to how much the Iraq adventure is costing the citizens of the United States.   The book, written by Joseph Stiglitz and Linda J. Bilmes, is titled "The Three Trillion Dollar War:  The True Cost of the Iraq Conflict."   In…

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