Revisiting Reagan: He Won the Cold War, But Lost the War Against Big Government
Sean McNamara’s biopic about former President Ronald Reagan, now in movie theaters across the country, provides a timely occasion to reflect on some essential principles lost in today’s world, marked by the confrontation between left-wing wokeism and right-wing nationalism, two forms of collectivist interventionism. It would benefit the Republican Party to rediscover these principles, and benefit the country if it did.
The film is one-dimensional, more impressionistic than thought-provoking, and would have been more effective if it had concentrated on certain defining moments, rather than sail through decades of personal and historical material. But it is stirringly timely.
The traits of Reagan’s personality are largely absent from today’s political landscape—the old-fashioned gentlemanliness, the bonhomie, the humor, the ability to inspire through idealism instead of hatred, the appeal beyond party lines, and the tendency to define the enemy in terms of anecdotes, images, and ideas, rather than name-calling and epithets.
Just as important, if not more, was Reagan’s devotion to principle. This did not come from his intellect, but from his intuition, which was, like his powers of communication, mighty effective. His convictions can be reduced to two overriding ideas: that communism was evil and that government should be limited.
And herein lies the contradiction of Reagan’s presidency. Although there is a logical coherence between these two goals, they turned out to be incompatible; the administration sacrificed one in pursuit of the other. The fragility of the Soviet system was the ultimate cause of its demise, but Reagan administration pressure accelerated the process. In doing so, however, Reagan’s effort to reduce the size of government gradually lost impetus and was eventually nullified.
Two factors contributed to this. First, the fact that Reagan had to contend with a split Congress in which the idea of undoing the big-government legacy of President Franklin Roosevelt’s New Deal (to which, ironically, Reagan himself had adhered in the past) and President Lyndon Johnson’s Great Society enjoyed minimal support. Second, a school of thought known as “Lafferism” (after Arthur Laffer) gained traction in the administration and the GOP, according to which lower taxes would unleash an economic torrent that would produce so much new tax revenue that government deficits would become a thing of the past, reducing the federal debt as well.
While tax revenues did increase significantly during Reagan’s years in office, from approximately $618 billion in fiscal year 1982 to $991 billion in fiscal 1989, government spending also took off. The result was a tripling of the deficit and the national debt (which increased from $995 billion to $2.9 trillion). By the time the Gipper left office, federal spending as a proportion of the GDP was not much different than it had been under Jimmy Carter, who in turn had failed to reverse the profligacy of the Richard Nixon–Gerald Ford years.
A significant part of the spending increase had to do with the primary objective of boosting U.S. defense capabilities. Raising military spending from almost $400 billion to $530 billion fueled a deficit that averaged 4 percent of GDP in the 12 years of the Reagan administration and his vice president and successor, George H. W. Bush.
On the domestic front, there were achievements, including some years of economic growth once the recession of the early part of Reagan’s presidency passed. Part of it was unleashed, no doubt, by lowering taxes, but, as some critics contend, another part had to do with the government’s deficit spending, with its deceiving and temporary effect, and Fed Chairman Alan Greenspan’s lax monetary policy.
Regardless, some of the Reagan years were undoubtedly economically successful. But reducing the size of government, a major goal at the beginning of the Reagan presidency, was not part of the Gipper’s legacy.
The force of principle and the power of ideas can be so effective in politics as to survive their advocates’ inability to live up to them and still maintain their relevance. That was the case of the ideas espoused by some of the slave-owning Founding Fathers who legated to future generations tools with which to combat that and other evils.
In the case of Ronald Reagan, not fulfilling, and even abandoning, the stated goal of reducing the size of government did not detract from the inspiring effect his relentless defense of individual freedom from government intervention had on the nation and on millions across the world.
Which is why some of the sobering statistics of his domestic legacy have paradoxically not diminished his standing as a symbol of limited government.
This piece originally was published by the Independent Institute.