Published December 12, 2016

The Life and Death of Reagan: A Sadly Educational Experience

By Doug Casey, July 2004

The accepted practice among those who write obituaries is to speak no ill of the dead. Perhaps that's because some consider it impolite to excoriate those who aren't in a position to defend themselves. Or maybe it's because of an atavistic fear that their shades (or at least their friends) will come back to seek revenge. But I put a bigger value on truth than on politesse, at least if my obits of people like Nixon, JFK Jr., and Princess Di (among others) are indications. The question is, of course, what is the truth? So let me give you my version about Reagan.

I have mixed feelings about Reagan. On one hand, he seemed like a genuinely nice and decent human being-something you can't say about many US Presidents. His heart seemed to be in the right place on most issues, and he said many appropriate and noble things. On the other hand, his administration was 95% talk and only 5% action when it came to rolling back the State. Of course, even just talk and good intentions are better than nothing. But let's look at his record.


In theory, Reaganomics (unfairly characterized as Voodoo Economics by the disastrous elder Bush-one indication of his principles), boiled down to reducing taxes and the size of government. Bravo! Who but the malevolent or terminally ignorant wouldn't approve? 

In practice, however, it was something else entirely, amounting mainly to a reduction of the top marginal tax bracket from 70 to 28%. It was a laudable start, but largely offset by many negatives.

In 1980, the final year of the benighted Jimmy Carter, the federal government spent $591 billion, with a $73.8 billion deficit. In 1988, the last year of the sainted Ronald Reagan, federal spending was up to $1.064 trillion (an increase of 80%), with a deficit of $155 billion (an increase of 110%). Sure, the money was worth less under Reagan-but that was mostly due to the outrageous deficit spending of the government he controlled. Few now recall that Reagan promised to eliminate the horrendous Carter deficits. Instead, he more than doubled them, creating an artificial boom-and a belief in government circles that deficits "don't matter"... the result of which will be, in time, a gigantic bust and likely an unprecedented economic disaster. 

Reagan's reduction of the top tax was excellent for many reasons I needn't bother discussing here. But in fact, the overall tax burden wasn't cut at all. 

First, Social Security taxes were raised significantly (from 6.13% on the first $25,900 in 1980, to 7.51% on the first $45,000 by 1988). SS taxes only serve to prop up the scandalous Ponzi scheme until it collapses in a war between the generations. In the meantime, it hurts the little guy worst. 

Second, the rapid inflation of the dollar resulted in "bracket creep," which pushed almost everyone automatically into higher brackets. 

Third was the elimination of "tax loopholes": for example, the abolition of numerous shelters, the elimination of the deductibility of IRA contributions, the imposition of the Alternative Minimum Tax, lengthening of depreciation schedules, the tightening of T&E and investment-related deductions, a clampdown on offshore activities, and overall tightening of IRS enforcement-among many other things. 

In fact, there can be no such thing as a reduction of taxes unless there's a reduction of government spending. That's because if the government doesn't get revenue from society directly through taxes, it must take it indirectly through inflation of the currency. Or borrowing, which simply puts off taxation and inflation into the future. 

Meanwhile, amid a lot of rhetoric about reducing the size of the State, the beast grew like Topsy under Reagan.

Early on, when he boldly canned the air traffic controllers for striking, it seemed as if he might make some serious changes. But he didn't go on to abolish the FAA or any other Federal agency. Not even the completely redundant and wasteful Dept. of Energy, which he had explicitly promised to do. Not even the Selective Service, even though in 1979 he said that it "rests on the assumption that your kids belong to the state.... That assumption isn't a new one. The Nazis thought it was a great idea." Good rhetoric around a core of hot air. 

Reagan talked the talk, but rarely walked the walk. I don't know why he failed. Maybe he became overwhelmed. Maybe the bureaucracy was just too entrenched. Maybe he was surrounded by too many bad influences in the top rungs of his regime. Maybe he just got to like things the way they were and was corrupted by the power. 

Early in his regime, there was a catchphrase among the more libertarian-oriented members of his administration, mostly second and third-tier players: "If not us, who? If not now, when?" Well, they were right. It wasn't going to be them, or then. If it proved impossible to roll back the State under what seemed like ideal conditions (a generation ago), it's going to prove to be three times as hard today, because it's that much bigger and more entrenched. 


So, sure, I'm disappointed in Reagan's failure, but certainly don't hold that against him. He was a decent, honorable man who probably did the best he could. What bothers me are the myths, lies, and bogus traditions that seem to surround the man and his death. The conversion of a man into a hero for ulterior motives.

The custom of apotheosizing dead politicians of whatever stripe is a very bad one. In a free society, when a man dies his memorial is created and paid for by his friends and family. But it's shameful to distract a whole nation for a week over the death of every ex-President. And even worse to force everyone to pay for it, whether they approved of the man or not. Presidents, certainly ex-Presidents, are simply citizens. And politicians. They're not emperors or royalty. And the idea of treating anyone as if they were should be hateful to Americans. The talk of putting him on a coin only shows how degraded the ethos of America has become. Times were (before 1909, with the Lincoln penny) we wouldn't dream of putting dead politicians on coinage. Like the Romans of the Republic, our coins only had images of things like Virtue and Liberty. But like the Romans, we've been transformed into an empire. Fortunately, we don't yet have sitting rulers enshrined on the worthless tokens in our pockets.

Was Reagan a unique force, personally responsible for winning the Cold War and economically revitalizing America? No. Fact is that in all societies, at all times, there are many men with intense desire to achieve power. Why do only certain ones succeed? I'd say because what they represent caters best to the spirit of the times. This becomes clear when we look at history, especially turbulent times of crisis. For instance, in the '30s and '40s, all over the world leaders were cut from pretty much the same cloth: dictators, or virtual dictators, were the order of the day. Stalin in Russia, Mussolini in Italy, Hitler in Germany, DeGaulle in France, Churchill in England, Roosevelt in the US, Franco in Spain, Tojo in Japan, Chiang and Mao in China. Don't be shocked to see them listed together. These men differed from each other only in style, what their societies would let them get away with, and the degree to which they trampled both civil and economic liberties.

After the economically disastrous '70s, all the world was looking for leaders with the common sense to take a different tack. It wasn't just Reagan in the US and Thatcher in England who saw that socialism was a dead duck; it happened throughout most of the world. Even Russia and China, the last places on earth where one might have expected it to happen, went to market economies. The prize for the best rhetoric absolutely goes to Reagan and Thatcher, and rhetoric is important. But the leaders of at least two dozen other countries should get the prize for the actual degree of constructive change that occurred under them.

What about the assertion that Reagan's defense buildup is what collapsed the Soviet Union? I consider that complete nonsense. In fact, Reagan's huge rearmament program (combined with an adventurist foreign policy (exemplified by the Grenada invasion and the bombing of Libya) very nearly precipitated World War III. Remember Reagan was surrounded by most of the same Neo-Conmen who surround Bush today. The difference is that, although he was certainly no rocket scientist, Reagan was both a lot smarter and wiser than Bush; he kept them under at least a modicum of control. As important, Reagan had a good heart, whereas Baby Bush is as mean as a snake. 

The USSR had always been an economic basket case; it sustained itself only through the export of roughly processed raw materials and loans from the West. As economically illiterate as the Soviet nomenklatura were, they knew they were basically nothing more than a large Third World country with a powerful military- which was bankrupting them. When they saw Reagan's arms buildup they were faced with a choice: Start WWIII while they still had a chance of "winning", or do nothing and hope for the best. Thankfully, they waited. But Reagan's arms buildup didn't precipitate their collapse; they were already vastly overcommitted to the military. We escaped WWIII by the skin of our teeth. But we're not going to escape the nasty economic and social consequences of Reagan committing America to Perpetual War for Perpetual Peace.

What did bring down the USSR? Its demise was inevitable, but the timing was brought on by the collapse of oil and other commodity prices after 1980. Reagan's excellent rhetoric (like, "Mr. Gorbachev, take down this wall!", and calling the USSR an "evil empire") did add some important psychological impetus. It was important for the slaves in the Communist world to see somebody, finally, calling a spade a spade. But the USSR would have collapsed anyway. Just as the Chinese would have free-marketized anyway, simply because people can ignore reality for only so long.

I'm afraid Reagan can only take credit for being a nice guy who led a full and interesting life. Politically, he played a minor supporting role on the plus side, while nearly starting a global thermonuclear war, further entrenching the State, and undermining the currency. Was he a popular President? I guess so, and he deserved popularity more than most Presidents. But my guess is that most of the people in tank-tops and shorts you saw lining the path of his funeral procession knew nothing about what he did or was supposed to represent. They were mostly just curiosity-seekers and idlers, Boobus americanus out to kill some time and take in a spectacle.