When conservatives discuss the debacle of mounting federal debt or the tax and spend policies of the Obama administration, without fail someone will bring up the good old days of fiscal conservatism under Ronald Reagan. I squirm in my seat every time I hear about those supposed good old days because in reality, they weren’t that good. Let me state at the outset that Ronald Reagan has no bigger fan than me. For eight wonderful years he returned America to glory and gave us back our pride after Jimmy Carter had turned our country into an economic mess at home and a joke abroad. But the hard truth, my fellow conservatives, is that Ronald Reagan did not cut federal spending. He increased it.
In fairness to the Gipper, he did cut taxes which in turn increased federal revenue. But he was unable to make a dent in spending because the Democrats refused to budge on that side of the ledger. The deal Reagan made with Tip O’Neill and company was that he would go along with their spending if they would go along with his tax cuts. As things were at that time in Washington, D.C., this was the best Reagan could do. I cannot say this about the Reagan administration though without adding an important reminder: he did prove that the government can increase revenue by cutting taxes. That alone would have made his presidency significant, even if he had not achieved all of the other things he is known and loved for.
In these times of spiraling federal debt and living on borrowed money, perhaps a better role model for conservative presidential wannabes would be Calvin Coolidge. Here is what Amity Shlaes had to say about Coolidge’s fiscal credentials in the February 2013 edition of Imprimis: “An alternative model for conservatives is Calvin Coolidge. President from 1923 to 1929, Coolidge sustained a budget surplus and left office with a smaller budget than the one he inherited. Over the same period, America experienced a proliferation of jobs, a dramatic increase in the standard of living, higher wages, and three to four percent annual growth. And the key to this was Coolidge’s penchant for saying “no.”
There are several important lessons contained in Shlae’s brief but powerful statement. First, she paints a picture for us of how things would have turned out during the Reagan years if he had been able to convince Congress to say “yes” not just to tax cuts but also to spending cuts. The result would have been an increase in America’s standard of living, higher wages, and four percent plus annual growth in the economy. Second, had Reagan been able to emulate Coolidge on both sides of the ledger—cutting taxes and spending—the economic upturn that finally took hold during the Clinton administration would have happened sooner, been more substantial, and lasted longer. Finally, the most important lesson taught by the Coolidge administration was to just say “no”—something neither Democrats nor Republicans in Congress have been willing to do.
Of course there is another important difference between Calvin Coolidge and today’s tax and spend members of Congress: Coolidge would have thought it anathema to use the federal treasury to turn Americans into entitlement addicts whose votes are guaranteed by their dependency on the federal government. Coolidge understood the nature of man: give him a little out of the federal treasury and he will want more and more and more. An addict never gets enough. This is why Coolidge became known for saying “no.” He understood that once you open the door to the federal treasury, closing it becomes virtually impossible. Where is Calvin Coolidge when we need him?