Jonathan Rauch commits The Sin Against the Holy Ghost of History:
Real Reaganites Raise Taxes: To reclaim President Reagan's legacy in the Obama era, conservatism may need to abandon the anti-tax dogma that it adheres to in Reagan's name.... How will we pay for, say, 24 percent [of GDP] government?... [T]he creaky, inefficient income tax is barely able to raise even today's inadequate revenues.... By taming inflation, restructuring the tax code, and thinning regulatory undergrowth, Reagan made the welfare state sustainable, something liberals had proved unable to do. He wooed middle-class voters away from liberalism by stabilizing the modern entitlement state, not shrinking it.... Bartlett wrote recently in Politico, "Conservatives would better spend their diminished political capital figuring out how to finance the welfare state at the least cost to the economy and individual liberty." Just like Reagan.
There are two big things wrong with Jonathan Rauch:
The--very strange--claim that the fact that the "income tax is barely able to raise even today's inadequate revenues" is a structural flaw in the income tax as an instrument. That is simply wrong.
The headline--"Real Reaganites Raise Taxes"--and its associated claim that Reagan's aim was "stabilizing the modern entitlement state, not shrinking it." Reagan wanted to cut taxes, not stabilize them. Reagan did not especially care about cutting spending for its own sake. He would have, had he had the votes and had he known that cutting taxes required cutting spending. But because he had, in Margaret Thatcher's words, "not too much between the ears" he did not understand the inconsistency between his spending and his tax plans. And so it is a gross distortion of everything Reagan stood for to say that "real Reaganites raise taxes."
I realize what Jonathan Rauch is trying--for his own tactical political reasons--to do: erase the history of the real Reagan and replace it with something else. But I protest. The story of Reagan's bamboozlement is an important part of American history that we should remember.
From his diary:
Thur Sep 10 1981: Dropped in on meeting of Ec. Advisors--a roomful of our country's greatest economists. None of them could explain why interest rates are so high.
Fri Nov 6 1981: We're going to have to build in more open time around meetings with Congressional leaders. Met 1st with Sen. leaders and meeting went 45 min. over time. Then the House Leadership which of course started late but ended later. The meetings were about the economy. With our plan barely started unforeseen things such as the high interest rates, etc. have increased the estimated deficit and make a balanced budget by '84 look unlikely. On the hill they automatically start thinking of tax increases. We differ and I think with good reason. I believe we reduced the differences between us but the press is going wild with its usual irresponsibility.
Thur Nov 12 1981: It looked like everything was going wrong today. The "Big 3" were waiting with a "what to do about Stockman" question. Before we could get into that--had a meeting with leadership Repub. of the House and Sen. on the budget--Stockman present. He asked for the floor--got up and told them he'd made a stupid mistake, etc and they applauded. Back in the Oval Off met with staff, George B. and Don Regan. I didn't go along with one or two who wanted to fire Dave--nor did Don R. or George B. Dave came over he and I had lunch. I had lunch--he couldn't eat. He stood up to it and then tendered his resignation. I got him to tell the whole thing about his supposed friend who betrayed him, then refused to accept his resignation. Told him he should do a "mea culpa" before the press and clear the misconceptiono that had been created by the tory. He was all set to go and did--taking their questions head on.
Thur Dec 10 1981: Met with Council of Ec. advisors.... Tax increases don't eliminate deficits they increase govt. spending. The general consensus was that our plan is the proper medicine for the recession and we should stick to it. That's what I intended to do all the time.
Thur Dec 22 1981: A budget meeting. We've finally come together on the cuts--probably won't get all we ask for from Congress. They're so used to spending (for votes) they're getting edgy with '82 being an election year. The recession has worsened, throwing our earlier figures off. Now my team is pushing for a tax increase to help hold down the deficits. I'm being stubborn. I think our tax cuts will produce more revenue by stimulating the economy. I intend to wait and see more results.
Mon Jan 11 1982: Repub. House leaders came down to the W.H.--Except for Jack Kemp they are h--l bent on new taxes and cutting the defense budget. Looks like heavy year ahead.
Wed Jan 20 1982 The day however was a tough one. A budget meeting and pressure from everyone to give in to increases in excise taxes tied to Federalism program. I finally gave in but my heart wasn't in it.
It is interesting how Reagan never asked his economic advisers: "Well, isn't what you are telling me now inconsistent with what you told me last year?"