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Commentary: Reagan was always for starving the beast

January 12, 2013|By Chriss Street

Ronald Reagan understood that Congress is in the business of growing the size of government. Raising taxes to supposedly cut government deficits is the scam that politicians use to increase their ability to borrow more money to spend.

As President Reagan famously said, "The problem is not that people are taxed too little, the problem is that government spends too much."

Reagan, as a true conservative, would have supported "starving the beast" by passing the "fiscal cliff deal" that the liberals will forever lament as the largest "permanent" tax cut ever passed in American history.

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Reagan rode to victory in his 1980 presidential campaign on the back of the 1978 California voter-approved Proposition 13. The initiative permanently cut the state's property tax rate and required a two-thirds majority approval from both houses of the Legislature for any future tax increase. The popular sentiment that drove Proposition 13 was that older Californians should not be priced out of their homes through higher taxes. The proposition's popularity quickly became the "third rail" of California politics, an "untouchable subject" for politicians to try to rescind.

Milton Friedman served as Reagan's key economic advisor during his presidential campaign, and for the next eight years in the Reagan administration. Friedman understood that due to the politics of the budgetary process, any attempt to cut a particular program will provoke intense opposition from a minority and only indifference from the majority. Friedman thought it was unreasonable to expect politicians to be willing pay the high political costs involved in cutting spending. He argued that only after permanent tax cuts, like Proposition 13, will politicians have no alternative but to cut spending. He reasoned that a cut in taxes, even without accompanying spending cuts, should not be a matter of long-term concern for conservatives:

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