From: pjm@anegada.sps.mot.com (Patrick J. McGuinness)
Subject: Reagan redux (was Re: A Clinton Mandate?!?)
Organization: Motorola Inc., Austin TX
Date: Sun, 22 Nov 1992 23:07:47 GMT

In article <1emcu4INNhsi@agate.berkeley.edu> lazarus@ocf.berkeley.edu (Andrew J. Lazarus) writes:
>In article <1992Nov21.202009.8198@oakhill.sps.mot.com> pjm@anegada.sps.mot.com (Patrick J. McGuinness) writes:
>>In article <1ee9d8INN8kg@agate.berkeley.edu> lazarus@ocf.berkeley.edu (Andrew J. Lazarus) writes:
>Mr. McGuinness, since you have access to the Statistical Abstract of the
>US, as do I -- as soon as I get it again from the library -- I retract
>my claim that you are clueless.
>
>You are DISHONEST.
The ad hominem does nothing but show petulence.

>As you know (I believe it is Table 511, but my copy is back at the

Nope I don't know ... the table was taken from the net.

>library), Federal revenues and expenses are divided between "Federal
>Funds" (for revenue, an example is income tax; for expense, defense
>spending) and "Trust Funds" (e.g., Social Security and Medicaid/are).
>
>Ronald Reagan cut tax rates for Federal Funds receipts, like the income
>tax. Social Security taxes went up. Income tax receipts went down, Soc
>Sec receipts went up.

>I explained this, proactively, in an earlier posting:
>
>>>Actually, Federal Funds Receipts (excludes trust funds), which is where
>            ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
>>>Reagan made tax cuts, PLUMMETED during the first Reagan Administration.
>			
>>This is truly absurd.  During Reagan's first Admin, tax receipts increased
>>from $517 billion to $666 billion. It "plummeted" from $517 billion in
>>1980 to $909 billion by 1988. (see below).  Strange plummeting.  
>                                             ^^^^^^^^^^^^^^^^^^
>	Dishonest comparison of an apple to an orange, right here!

Yup, Apples to oranges. Problem is, you started with the apples vs. oranges
when you responded to my statement that tax receipts during the
Reagan term increased with your above statement.
I guess the subtlety of picking irrelevent statistics to make a
non-rebuttal are lost on a dunderhead like me. ;-)
My whole point was to show you were missing the (my) point:
Do you agree that total tax revenues went up under Reagan?
Do you agree that total GNP increased under Reagan?
What was the tax revenue picture for the whole of his time in office,
not just a few selected years?
("under Reagan" defined as his term in office - 1981-1989. Precise enough?)

>>In billions (%GNP):
>              --> BOGUS COLUMNS <---
You consider the Statistic Abstract 'bogus'? :-)

>>year  GNP    receipts     outlays        deficit    unempl%       admin
>>====  ====   ===========  ============   =========  ======        =======
>>1980  2674    517 (19.3)    591 (22.1)    74 (2.8)     7.9        Carter
>>1981  2986    599 (20.1)    678 (22.7)    79 (2.6)     8.4        Reagan
>>1982  3130    618 (19.7)    745 (23.8)   127 (4.1)    11.0        Reagan
>>1983  3325    601 (18.1)    808 (24.3)   207 (6.2)    10.9        Reagan
>>1984  3688    666 (18.1)    852 (23.1)   185 (5.0)     8.6        Reagan
>>1985  3958    734 (18.5)    946 (23.9)   212 (5.4)     8.1        Reagan
>>1986  4177    769 (18.4)    990 (23.7)   221 (5.3)     7.9        Reagan
>>1987  4442    854 (19.2)   1004 (22.6)   150 (3.4)     7.1        Reagan
>>1988  4771    909 (19.1)   1064 (22.3)   155 (3.2)     6.3        Reagan
> 
>>source: Statistical Abstract of the US
>
>Despite my earlier explanation, you deliberately and willfully listed
>TOTAL receipts, including Federal Funds receipts (which, as I claimed,

Horror of horrors. Yes, I listed total receipts.
How else can we look at the whole budget and deficit picture?
How else can I defend my (not dishonest, but accurate) claim that tax
revenues under Reagan increased?

>WENT DOWN after the tax cuts) added to Trust Fund receipts (which went
>up consistently). However, the defense binge (which I will turn to in
>another posting) is a Federal Funds expense and should be paid for out
>of Federal Funds receipts. As I indicated earlier, in constant dollars
>these receipts were below 1981 level in 82, 83, 84, and 85. In some of
>those years (82->83) they even fell in current dollars. Income tax
>receipts--a cornerstone of Reaganomics--were lower in 84 than 82 in
>CURRENT dollars (you can't get this from Stat Abstr, it skips too many
>intermediate years).

Interesting. According to "The Growth Experiment", which studied
the effects of the 1981 Reagan tax cuts by looking at over 30,000 tax returns
in the 1980's, income tax receipts were $33 billion lower in 1985 then
they would have been without the tax law change. It is not surprising
that income tax receipts fell from 1981 to 1982, since it was a recession.
I haven't seen the numbers you claim in table 511, but for the recession
years (81-82) and tax cuts years (82-83), it does not surprise.
Is it surprising that in a year in which the income tax was cut
10% (1983), income tax receipts fell? Wow. Profound. However, carry those
numbers out a few years. Added growth - thanks in part to those
very same tax cuts - created the wealth that in turn increased Government
coffers - yes, including income tax receipts.

Carry it out to 1985, '86, '87, '88, and you find that the effects
predicted by the supply-siders were by and large borne out. Add to that
the fact that for some groups, eg those that went from 70% tax rate
to 50% tax rate, there was an immediate increase in tax revenues
(in 1983 versus 1982) - proof that these taxpayers were on the downslope
of the Laffer curve. One can judge the Reagan tax cut a success
in a number of ways: did not greatly reduce revenues, increased
economic growth, lowered disincentives in the economy, and (contrary
to Democrat mythology) shifted the income tax burden from lower
and middle class taxpayers to wealthy taxpayers.

I doubt that Andy considers Reagan a success in this or anything -
for him to admit any positive thing about Reagan would apparently shatter
his brittle world-view. 

>I hope this is clear to the net now.

Phew, quite clear to me. You were talking past me, not at me.

>BTW, did you correct unemployment for the revised method of measuring
>it? Just checking?

>Your other mathematical solecisms, generally involving choosing a
>function instead of its derivative or integral (or vice versa), 

>will be covered later. Well, except one: the point is not that at the
>end of the Reagan era the percentages had temporarily returned to those
>of the beginning, because the debt is, of course, the SUM over the
>Reagan years of the deficit.

And the point being about the size of the deficit ...
it indicates the rate of growth (ya know, derivatives and stuff :-) )
of the debt.  So the 1988 deficit was about equivalent to the 1980
deficit.  ... meaning the growth of the debt at that point
was managable, since it was barely growing relative to GNP. 

>3 items were a much larger share of the budget at the end of the
>Reagan era than at the beginning: defense spending, entitlements, and
>INTEREST on the debt.

Agreed on entitlements and interest. On number one: defense spending
was not *significantly* higher (matter of defining the amount I guess),
and of course has been falling as a percentage of GNP since 1985.
In other words, the buildup of the early 1980's has been by and large
reversed since then.

Pat
       " The 1990 Budget agreement was a big sucess " - Foley

       " We'll have to increase the deficit for the next two years,
         otherwise we'll have to raise taxes " - Democratic coalition

	"taxation may be so high as to defeat its object, and that, given
sufficient time to gather the fruits, a reduction of taxation will run a better
chance, than an increase, of balancing the budget." --John Maynard Keynes
(1933).
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