Glenn Kessler debunks Reagan’s bogus old tale!

MONDAY, DECEMBER 17, 2012

And it only took twenty-three years: Almost every part of our public discourse is built around false, bogus tales.

These bogus tales get memorized, then widely presented as fact. Depending on who is behind the tales, the bogus tales will be widely accepted by the mainstream press corps.

In Sunday’s Washington Post, Glenn Kessler debunked one of those hoary old tales. And by our count, it only took twenty-three years!

As far as we know, Kessler did a good job in this piece—although he failed to name the people who have been telling this hoary old tale in recent weeks. That said, he named the original source of this bogus tale.

It came from Ronald Reagan!
KESSLER (12/16/12): It had become an article of faith by conservatives that President Reagan reluctantly agreed to raise taxes in his first term in office—and that Congress then failed to follow though on promised spending cuts. The frequent recitation of this story during the current fiscal debate made us wonder: What actually happened three decades ago?

It’s not hard to find the source of this story—Reagan’s own memoir, “An American Life.” Here’s what he wrote: “I made a deal with the congressional Democrats in 1982, agreeing to support a limited loophole-closing tax increase to raise more than $98.3 billion over three years in return for their agreement to cut spending by $280 billion during the same period; later the Democrats reneged on their pledge and we never got those cuts.”

When Reagan made a nationally-televised speech in support of the tax hike—trying to refute charges that it was the biggest tax increase in U.S. history—he also cited a 3-to-1 agreement:

“Revenues would increase over a three-year period by about $99 billion, and outlays in that same period would be reduced by $280 billion. Now, as you can see, that figures out to about a 3-to-1 ratio—$3 less in spending outlays for each $1 of increased revenue. This compromise adds up to a total over three years of a $380 billion reduction in the budget deficits.”

The Washington Post did not have a Fact Checker column back then, and this speech certainly would have been ripe for fact checking.
According to Kessler, “conservatives” have been retelling this story in recent weeks. This is plainly true, of course. This is one of the ways hard-liners have argued against the idea of accepting higher tax rates.

But uh-oh! As Kessler explains in great detail, with strong sourcing, this hoary old story is wrong!

To watch Kessler debunk this hoary old tale, go ahead—read his whole piece. For ourselves, we were struck by one of the dates involved in his presentation.

According to this bogus old story, Congress failed to follow through with promised spending cuts after the 1982 budget deal. How does Kessler know this story is wrong?

In this passage, he cites a key source:
KESSLER: Here’s the actual breakdown of the three-year agreement, according to a June 1982 chart prepared by the GOP-controlled Senate Budget Committee staff, which appears in the 1989 book “The Deficit and the Public Interest,” by Joseph White and Aaron B. Wildavsky.

[...]

“In essence, the funny numbers, meant to impress voters and maybe the markets, fooled the president. They also fooled Donald Regan and Ed Meese,” write White and Wildavsky. “To Stockman, Baker, [Richard] Darman and congressional leaders, this sense of betrayal was ludicrous; no one ever said Congress would pass three-for-one. The [congressional budget] resolution was clear enough about that.”
You’ll have to read Kessler’s report to get the whole story. Warning: His presentation of that June 1982 chart is hopelessly confusing.

That said, please note the date of the book Kessler cites as a source. If Kessler’s presentation is right, this hoary old tale was debunked in 1989. But conservatives have been still out there pimping the bogus tale this past month!

Do you live in a banana republic? Inside a journalistic Babel?

This is the way your discourse works in almost every area! Even after bullroar gets debunked, it may be widely repeated—and widely accepted—for many, many years!

Go ahead—just ask Paul Krugman. Or you can just click here.

Almost all parts of our public discourse function this way. Favored pols or powerful interest groups simply invent false stories. Even after the stories have been debunked, journalists keep lapping them up.

This fall, the press kept repeating a bogus tale by McCain—a tale which took down Susan Rice. But that was really a blip on the screen:

Good God! For the past thirty years, they’ve been accepting this bullroar from Reagan!

16 comments:

  1. McCain was a high profile critic of Susan Rice and her September interviews, but he was not alone. The press also covered the unsuccessful attempts by Rice to appeal to Ayotte and Collins. If the press kept repeating the bogus tale, it did have more sources than McCain. Were there any elected GOP leaders in favor of Rice's nomination?

    And overall the press coverage for Susan Rice over the past 3 months has been sympathetic... for example, nobody mocked her ridiculous assertion that "The position of Secretary of State should never be politicized." Given that Rice is no doubt aware of the political background of the current Secretary of State, it should have been taken as a joke. But it was not. She continues to serve with the approval of all serious people in the press.

    ReplyDelete
  2. Kessler wrote: In fact, historical budget data show that Congress did reduce spending. From 1982 to 1983, nondefense discretionary spending fell from 4.3 percent to 4.2 percent of the overall economy (gross domestic product) — and then kept falling until it reached 3.4 percent of GDP in 1989.

    His “proof” for this claim is not based on the actual spending, but on the ratio of spending to GDP. By plugging in the GDP, we can calculate the actual dollars of Non-Defense Discretionary Spending (NDDS). In fact, from 1982 to 1989, Actual NDDS grew by 18%.


    YEAR……..GDP……………..NDDS %................NDDS $
    1982 …$3253 billion……….4.3%..................$149 billion
    1989…. $5482 billion….….3.2%...................$175 billion

    What actually drives Kessler’s assertion is the marvelous economic growth that was encouraged by Reagan’s policies. I wish Obama and the Dems could do half as well.

    ReplyDelete
    Replies
    1. "Reagan's policies" -- you mean like the raising of taxes? Which of "Reagan's policies" led to this "marvelous economic growth" of which you speak? In your answer -- and I know an intelligent, fact-informed answer that isn't boiler plate from Heritage will be forthcoming -- please make sure to include the role that Paul Volcker and the Fed played, or didn't play, in the whole thing.

      Thanks in advance, and looking forward to seeing more of your informed opinion.

      Delete
    2. The Real David in CaliforniaDecember 18, 2012 at 7:22 AM

      All "marvelous" growth is due to Presidential policies, if I like the policies (and if I'm allowed to ignore the policies I didn't agree with, or that the President couldn't control, and as long as I can pick a favorable baseline)!

      What?

      You say that's called being full of sh!t?

      Maybe so, maybe so...

      Delete
  3. Sorry, I mistakenly used 3.4% insteat of 3.2%. The actual 1989 NDDS was $186 billion. Compared with $149 billion in 1982, that's an increase of 25%.

    ReplyDelete
    Replies
    1. David in Cal -- Are those NDDS spending numbers in constant dollars?

      Delete
    2. They're in nominal dollars. Inflation from 1982 to 1889 was about 29%, so adjusting for inflation the NDDS declined slightly. It should decline during a period of growing prosperity, because expenses related to poverty and people being out of work should decline.

      Delete
    3. Quaker in a BasementDecember 18, 2012 at 1:32 AM

      They're in nominal dollars.

      I see. So you were playing us right from the start?

      Delete
    4. "So you were playing us right from the start?"

      ...As always.

      Real growth was flat, even though population was up 6% and GDP was up 69%.

      DavidinCA can *never* be trusted. Call it the Golden State rule of this blog comments section.

      Also, he's (of course) wrong that NDDS should decline when GDP rises: Most of NDDS is NOT composed of poverty-related expenses.

      It has tracked GDP fairly closely for the last 50 years, staying in a range of 2.5%-3.5% of GDP. There was a brief bump to 4.5% GDP in the late '70's.

      Delete
  4. How bad was Reagan? Shortly after Reagan was elected a lady friend wore black everyday in mourning for America. At the time I wasn't sure, but upon reflection her timing was about right.

    ReplyDelete
  5. How bad was Reagan? Shortly after Reagan was elected a lady friend wore black everyday in mourning for America. At the time I wasn't sure, but upon reflection her timing was about right.

    ReplyDelete
  6. The Reagan economic "miracle" can be sourced to his con of the American people into accepting wage sacrifices that resulted in both the husband and wife working outside the home to make slightly more in income then when the wages for the head of household permitted a spouse to remain at home to raise children. Trickle on economics was so bad that some Americans learned to survive by starting their own businesses. The increase in small businesses under Reagan was due to the desperation of people who could not find work that paid enough to raise a family. To disguise the negative effect on worker's wages, that Reagan's policies caused, lending regulations were eased that made credit available to a wider demographic and turned America into a nation of debtors.

    ReplyDelete
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