A recent commentary was posted on this site written by Carol Shea Porter, you can read it in full HERE. In her piece she quote Ronald Reagan discussing defaulting on government loans. She takes a quote from 1983 and another from 1987 in an attempt to link them to today's issues with the debt ceiling.
I find it interesting for two reasons. The main being that Reagan's deficit and later Bush's deficit spending levels were railed upon by democrats for years. Democrats have maintained that the deficit spending was one of the biggest failures on both their parts and now they are taking a complete opposite claiming this is necessary.
The other part that is interesting is how she manages to take quotes from Reagan completely out of context attempting to paint them as saying something other then what he meant.
As Ronald Reagan said in 1983, “the full consequences of a default, or even the serious prospect of default by the United States, are impossible and awesome to contemplate.” In 1987, Reagan called refusing to raise the debt ceiling “brinksmanship” that ”threatens the holders of government bonds and those who rely on Social Security and veterans benefits. Interest rates would skyrocket, instability would occur in financial markets, and the Federal deficit would soar.”
For starters Carol didn't even write these words herself despite taking credit as if this were her own writing. She plagiarized "Think Progress" in an article found HERE. They wrote (back in May):
For months, Republicans have been claiming that they will refuse to raise the debt ceiling — and thus risk the widespread economic consequences of the U.S. eventually defaulting on its debt — unless several conditions are met, including cuts to Medicare and Social Security. In fact, some Republicans have said that they think that default wouldn’t be so bad. “The case has not been made that this is an absolute necessity,” said Rep. Bill Huizenga (R-MI).
However, Republicans poo-pooing the necessity of raising the debt ceiling might want to look to conservative icon Ronald Reagan. In 1983, Reagan warned that the consequences of failing to raise the nation’s borrowing limit “are impossible to predict and awesome to contemplate”:
The full consequences of a default — or even the serious prospect of default — by the United States are impossible to predict and awesome to contemplate. Denigration of the full faith and credit of the United States would have substantial effects on the domestic financial markets and the value of the dollar in exchange markets. The Nation can ill afford to allow such a result. The risks, the costs, the disruptions, and the incalculable damage lead me to but one conclusion: the Senate must pass this legislation before the Congress adjourns.
In a 1987 radio address, Reagan also said, “Congress consistently brings the government to the edge of default before facing its responsibility. This brinksmanship threatens the holders of government bonds and those who rely on Social Security and veterans benefits. Interest rates would skyrocket, instability would occur in financial markets, and the Federal deficit would soar.”
Sound familiar? Go back and reread her letter again. Hmmmmmm.
Another point worth discussing is how in both cases they take Reagan's talking points out of context of the full discussion he was having. Here's a link to his full 1987 speech.
Reagan isn't saying spending is good, he is upset because Congress (at the time lead by Democrats) continued to push through budgets loaded with deficit spending and rather then address the real problems back Reagan into a corner of having to either default on obligations or increase the debt limit and playing politics, Democrats attempted to paint him the bad guy for wanting to increase the debt limits.
The difference is today Republicans are trying to curb the spending unlike the Democrats in the 80s and once again instead of taking on responsibility, Democrats are now the ones pushing for more of a spending limit.
I would have no problem with signing an extension of the debt limit. But the choice is for the United States to default on its debts for the first time in our 200-year history, or to accept a bill that has been cluttered up.
Unfortunately, Congress consistently brings the Government to the edge of default before facing its responsibility. This brinkmanship threatens the holders of government bonds and those who rely on Social Security and veterans benefits. Interest rates would skyrocket, instability would occur in financial markets, and the Federal deficit would soar. The United States has a special responsibility to itself and the world to meet its obligations. It means we have a well-earned reputation for reliability and credibility -- two things that set us apart from much of the world.
Some in Congress will claim that if I reject this bill with its Gramm-Rudman-Hollings fix, then I'm against deficit reduction. But, of course, nothing is farther from the truth. Since 1980 when you first elected me to this office, I have led efforts to control Congress' appetite to spend in deficit. Over a 5-year period, while revenues went up 28 percent, congressional spending went up 46 percent. From 1982 to 1987, for every dollar Congress cut from our national defense, they added $2 for domestic spending. Now, that's not fiscal restraint. Two years ago, Congress took a first step to curb spending with Gramm-Rudman-Hollings, and I agreed. Its purpose was to get on a track to lower deficits and eventually a balanced budget. Well, the ink was not even dry before Congress walked away from its own plan. Instead of facing the tough choices to reduce Federal spending, Congress attempted to shift the burden to our national security and to you, the American taxpayers, in the form of new taxes.
Read what's being said here. Unlike today where we have Republicans in Congress trying to curb spending, Reagan had a government under him that refused to stop spending and put him in a position of either having to default on obligations because the money was wasted on other things or approve increased debt limits.
To quote Carol again "Sad, isn’t it?", what's said is that we have a former congress woman who does not understand the federal budget.
It's like this...
Lets say taxes coming into the government is your income. Now as anyone with a paycheck knows there are taxes being taken each and every day from your check so the government doesn't just get money all at once on tax day, they have a steady flow all year long.
Next, just like we have rent/ house payments, insurance, food costs etc that are obligations we must meet the government too has obligations it committed too. Salaries for federal employees and military, Social Security payments etc. Also like us some of those costs can be partially controlled. Food, while being a necessity comes in different types. We can spend 99 cents on a box of Mac and Cheese or we can spend $20 for a really good cut of meat. Likewise the government can hire a few people to run a needed department and get the requirements done or they can create an entire federal level bureaucracy with teams of people.
Next is discretionary spending. This is money that is not required by any law to be spend and can be stopped at any time. In 2010 it made up 38% of all federal spending.
Then there's debt, think of this similar to credit cards. This gives you the ability to spend above and beyond what you take in but you have a minimum payment you must make to pay it back and eventually you hit a limit.
What our government has been doing for years now under both parties is spend more then they have and continually take out more new credit cards. If we finally max out all the cards we have and the bank (Republicans in congress refusing to increase the debt ceiling) we don't stop getting an income and we don't instantly stop paying out our mandatory obligations or even stop making the minimum payment on our credit cards. Carol and other tax and spenders however want to make us think that we would, that without giving more credit cards all government would stop.
Of course the biggest laugh I received from Carol's letter was her closing statement:
Although NH members vote with their party at least 95% of the time, I hope they will rise above politics and vote with Ronald Reagan rather than their current leadership.
This is coming from the woman who voted in line with her own party's leadership over 98% of the time and who's party's out of control spending since taking control of both houses in 2006 helped get us to the point we're at today.
Let me leave you with a parting thought, as we continue to hear the debate heat up on the debt limit Democrats like Carol are claiming that Obama and other Democrats are willing to cut spending and point to Obama's willingness to cut $1 Trillion in spending from the budget.
Here's the truth on that statement, he wants to cut it over a 10 year period. That's only $100 Billion a year in cuts.
The one trillion dollars is then actually $100 billion per year, which breaks down to $273,972,603 cut per day.
That nearly $274 million a day cut would be great if the administration wasn't averaging over $4.5 billion a day and the cut brings it down to $4.27 billion spent a day!
Under Clinton only about $527 million dollars was spent a day and under George W. Bush only $1.7 billion was spent a day.
Even with Obama's $1 Trillion cut he's still spending $2.57 Billion a day more then Bush spent on average. That's not a cut. A cut would bring spending down to LESS then it was before Obama took over.
If this sounds familiar it should. Lynch and company pulled the same stunt here in NH increasing spending by double digits then pulling back 8% of that new spending alone and claiming it was a cut.
Then we wonder why spending continues to spiral out of control.