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From: simard@loral.UUCP (Ray Simard)
Newsgroups: net.flame
Subject: Re: economy
Message-ID: <507@loral.UUCP>
Date: Mon, 24-Sep-84 15:46:20 EDT
Article-I.D.: loral.507
Posted: Mon Sep 24 15:46:20 1984
Date-Received: Thu, 27-Sep-84 03:31:35 EDT
References: <855@ihuxe.UUCP>, <1067@shark.UUCP>
Organization: Loral Instrumentation, San Diego, CA
Lines: 54

[The IRS ate this line]

>     Reagan has NOT implemented the policies he promised.  He has  implemented
>the inverse of the policies he promised.  As I recall, his major indictment of
>Carter was the incredible deficits Carter ran up.  (A legacy from the Ford and
>Nixon administrations which the gentleman from Georgia was unable to cope with
>effectively.)
>
>     Now, Reagan has run up a deficit larger than anything Carter  would  have
>dared  to  run  up.   Of  course, since Reagan is a better actor, and a better
>leader because of it, he can convince a lot of people who ought to know better
>that he has actually fulfilled his promises about the economy.


     Beg to differ!  Reagan promised to reduce taxes; he did.  He promised  to
reduce  the rate of spending growth; he did as much as the Congress (the House
in particular) let him.  What he was unable to do was to  impact  enititlement
spending  as he would have liked.  This is the area that generates most of the
spending.

     These born-again deficit complaints are specious.  The reason for them is
that,  instead  of raising spending levels faster than the growth of tax reve-
nues (as previous administrations did), taxes were cut, leaving more money  in
the  pockets  of  the  citizenry  to  use  as  they like, and the Congress has
resisted cutting spending to compensate.

     Remember TEFRA?  That was that wonderful deal  cut  between  T.P. O'Neill
and  the  president that was going to increase taxes with a three-to-one ratio
of spending reductions to tax increases.  The president signed  the  increases
into  law,  and  behold!   Not three dollars in spending to each dollar of tax
increase; not two, not one, not even zero!  Spending levels increased!   Uncle
Tip reneged entirely on his committment.

     As economist Milton Friedman has pointed out, the cost of  government  to
the  people  is  not  what it taxes, but what it spends.  You can tax, you can
borrow, or you can monetize.  Each has its good and bad points.  However, none
of them can reduce the total burden on the taxpayer one nickel below the total
spent.

     The only way that a permanent, fiscally sound prosperity will be  created
is  to  treat  the  spending  of government the way we treat our own; based on
available revenues, with the knowledge that dollars left  in  the  pockets  of
citizens  produce  savings  and  consumption,  both necessary for a prosperous
economy.  Spending nearly a quarter of the entire GNP on government is far and
away too much, and the social damage of such levels exceeds the social benefit
of many of the programs that generate that spending.

-- 
[     I am not a stranger, but a friend you haven't met yet     ]

Ray Simard
Loral Instrumentation, San Diego
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