Tuesday, June 08, 2004

The Greatest President Like Ever Ever! 6.8.04

from the Guardian:

For better or worse - and, in my unfashionable view, it was for worse - Reagan and Thatcher made such an impact on their respective societies that their names were given to Reaganomics and Thatcherism.

The anti-government rhetoric of both leaders did a lot of damage to the very concept of public service. In front of cabinet ministers and officials, Mrs Thatcher used to rail against government as though she were an outsider from another planet, not at the head of it.

And the anti-government rhetoric of both was overdone. Of course, governments and officialdom have to be watched at every turn. But it is impossible to run large democratic societies without a considerable degree of government - the real point being that the emphasis should be on good government, not no government.

There was a fundamental flaw at the heart of Reagonomics, namely the idea - epitomised by the famous Laffer Curve - that tax cuts would pay for themselves via greater incentives.

The truth was that the supply side doctrine was a crude and intellectually shabby attempt to justify tax cuts for the rich. For those with incomes above $250,000 (£135,879) a year, taxes as a percentage of income came down from 48.6% to 38.9% between 1980 and 1984.

The way in which certain tax exemptions were removed actually led to a rise in the proportion of income paid in tax by the lowest income groups. In most of the eulogies for Reagan this week, all those cuts in government expenditure on food stamps, school lunches, welfare Medicaid and subsidised housing have been forgotten.


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