Recession math smacks head-on into Reagan myth

Georgia Republicans have a choice to make, a choice between math and myth.

The math is pretty simple: We're heading into a major recession that a lot of economists predict could be deeper and longer than anything we've experienced in a generation or longer. Already, state revenues have begun to fall significantly, raising fear of budget shortfalls.

In California, the situation has already gotten so bad that 20,000 school employees may soon be laid off to balance the budget.

Under such circumstances, basic math says that passing significant tax cuts would compound the problem. It would turn potentially serious budget cutbacks into something truly traumatic.

But then there's the myth, as embodied in Ronald Reagan. The Reagan myth says that there's no such thing as a bad time to cut taxes. The Reagan myth says that cutting taxes will boost the economy, and thus government revenue. So when House Speaker Glenn Richardson touts his plan to eliminate the car tax, he cites Reagan as his tax-cutting model, claiming that it will stimulate the economy.

When Lt. Gov. Casey Cagle touts his competing proposal to cut the state income tax, he too claims that it will stimulate the state economy and ease the coming recession.

It is all so much nonsense, ideology masquerading as wisdom. In the fiscal year beginning in July, Cagle's tax cut will cost $215 million. That's a lot of money in the state budget, but the idea that it will stimulate a $370 billion Georgia economy is absurd.

Reagan would have known that. In 1967, his first year as governor of California, the sainted conservative hero signed a tax increase of almost $1 billion. That was back when a billion dollars was real money. Accounting for inflation, it would be the equivalent of a $6.3 billion tax hike today.

Why did Reagan raise taxes? Because it was the right thing to do. California at the time faced a serious budget shortfall. For all his rhetoric, Reagan was a practical politician. Today, for daring to be fiscally practical, he would be run out of the Republican Party that claims him as its hero.

Reagan did the same when he became president. He talked a good game on taxes, and in 1981 he forced through a major tax cut that defined him in the public eye. But the next year he signed two major tax hikes, including the largest peacetime tax hike in American history when measured as a percentage of the national economy. Other large tax increases followed in 1983 and 1984.

This is all a matter of history, but it is ignored by conservatives who prefer to remember the Reagan rhetoric while ignoring the Reagan record...........