In my last entry, I asserted that there was an analogy between the Reagan defense buildup in the 1980s, which was funded by deficit spending, and the Bush/Obama response to our current economic troubles, also funded by deficit spending.
Anson Burlingame, fellow blogger, responded to my assertion (see comments to last entry) by apparently disagreeing with the analogy. As I understand him, he thinks that the nature of the Soviet threat, which was the de facto justification for the huge defense-spending increases under Reagan, was understood and accepted as “fact,” and therefore the deficit spending wasn’t as controversial. Anson is skeptical that the current massive stimulus spending is necessary, and wonders whether we can afford President Obama’s efforts to achieve some of his domestic goals. Anson’s concerns are legitimate and are no doubt shared by many sensible people—except, of course, most babble heads on conservative radio.
So, I wanted to respond to Anson here, hopefully to make the parallel a little clearer and the rationale for supporting Obama more transparent to those who may not understand why anyone would defend the enormous amount of spending that is currently going on.
Your assumption that people in the 1980s shared your understanding of the obvious nature of the Soviet threat—which required massive government spending to confront—is, I think, mistaken.
Just as a quick example, in 1987, when he was a Republican presidential candidate, General Alexander Haig (remember him?) criticized Reagan this way, according to the Washington Post:
Haig told Washington Post editors and reporters that Reagan’s tax cuts and spending policies, particularly his defense buildup, are responsible for the enormous federal budget and foreign trade deficits and said that the defense buildup in the first years of the Reagan administration was wasteful and possibly counterproductive.
And that was the opinion of a Republican.
Another example involves NATO’s deployment in Western Europe of the American-made Pershing II nuclear missiles, which was highly controversial at the time. The fight over the deployment, as I remember it, was very divisive, showing that there was not a consensus on our approach to countering the Soviet menace. In fact, the Soviets were using ongoing discussions over the reduction of Intermediate-range Nuclear Forces (INF) as a tool to undermine Western support for the Pershing II deployment.
As Time magazine reported then:
…it is clear that the Soviets’ skillful propaganda—stressing their peaceful intentions, their willingness to reduce their numbers of missiles aimed at Western Europe and their flexibility at the bargaining table—has convinced many Europeans that the Soviet disarmament goals are genuine.
So, I think it is incorrect to suggest that the facts were much clearer about the threat posed by the Soviet Union than they are about the current economic crisis. To me, the two are strikingly similar. The need now to spend mountains of money may not be as apparent to you, Anson, as it is to others, just like the need in the early 1980s to spend mountains of money to counter the Soviets was not as apparent to some as it was to others.
There was doubt about what to do about the Soviet threat, and there was doubt about what to do about the economic crisis. To adequately address both perceived threats (real or not), required much deficit spending, and good people can differ about the wisdom of spending money we don’t have; but they should do so without–as many conservatives now do–calling Obama a Socialist, Communist, Marxist, foreigner, or any other epithet du jour.
Finally, your speculation that Obama’s efforts regarding health care, green energy, and education may fail to “produce the desired results” is quite possibly the way it will turn out. But even you believe those efforts are legitimate, though you are dubious about whether those efforts should be funded by deficit spending. I reluctantly share your skepticism about the results, largely because our political system is by design a cumbersome instrument by which to achieve clean outcomes. What is proposed initially quite likely will look very different at the end, and who knows whether it will work.
I also share your concern about the amount of money we have spent and are spending, and there is, as I said, a legitimate debate on whether it was and is necessary. But if Obama’s efforts are successful—if they meet even our mildest, not to mention our wildest, expectations—the legacy we will hand our children and grandchildren will be worth the deficit spending, just like the end of the Cold War (if it was in fact hastened by Reagan’s big budgets) was worth the money we spent but didn’t yet have in the 1980s.
I want to direct you to something written in 2004 by Brian Riedl, a member of the Church of Ronald Reagan of Latter Day Conservatives, also known as the Heritage Foundation:
Not all debt is bad. Mortgage debt and student loan debt are worthy investments. No one criticizes President Franklin Roosevelt for the massive debt that financed World War II. Yet the commentators criticizing President Reagan for the $2.1 trillion in added debt (all numbers are in today’s dollars) ignore how that debt won the Cold War, lowered the tax burden, and ignited the largest economic boom in American history.
… President Reagan spent $3 trillion on defense, well above the $2.2 trillion baseline. What did that extra $800 billion buy? The end of the Cold War — saving, perhaps, a billion lives from nuclear extinction.
While that bit of hyperbole may be as overblown as talk last year that our financial system risked extinction, and while we may be apprehensive about the accumulating and massive debt, there are some of us, like those who accepted Reagan’s massive defense spending almost 30 years ago, who are willing to give Obama a chance to—and are offering him our hopes that he will—succeed, rather than hoping he fails, like so many on the Right now do.
Sunday, April 26, 2009, 12:12 PM
As you acknowledged in a subsequent email, you did not mention by point about the constitutional mandate for “raising and army and navy” and the lack of such a mandate in the constitution for universal health care, et al. For those interested please read both of my comments to Duane’s Limbaughnitics blog.
Make no mistake, if we can pay for it over time, I fully support President Obams’s vision.
The accumulation of debt for investment in the future is a wonderful part of America. Borrow for a house or education makes all the sense in the world, IF, you have a rational plan to ultimately pay off the debt and in your own lifetime. That is what I consider “living within your means”. No will should contain a mortgage payment or credit card payment for the beneficiaries.
Debt amortization must be a part of any budget. It is an expense over the long run just like groceries are a short term expense. But whoa befall the household that buys a $500,000 house when only a $100,000 house matches the budget. And whoa befall the lender as well.
The vision for the investment and the debt amortization for the expense must run hand in hand. I only see one so far under this President and that worries me, a lot.