The Reagan Era, Still Going

Religious leaders and religious communities are mostly united on the idea that we humans are bound together in a web of reciprocity and mutual supportand that there is something godly about such interdependence. Thus, for example, Gov. John Winthrop, adjuring the company that was about to sail from Southampton to the New World in 1630:

We must be willing to abridge ourselves of our superfluities, for the supply of others’ necessities. We must uphold a familiar commerce together in all meekness, gentleness, patience and liberality. We must delight in each other; make others’ conditions our own; rejoice together, mourn together, labor and suffer together, always having before our eyes our commission and community in the work, as members of the same body.

Ethicist and historian Gary Dorrien finds very little of Winthrop’s spirit in the never-ending attacks mounted against progressive taxation by todays Republicans: they all like the “City Upon a Hill” part of Winthrops sermon, but they ignore the part about what it takes, values-wise, to deserve that hilltop. eds.


The Reagan era was supposed to have ended in November 2008—killed off by 30 years of flat wages and capitulation to Wall Street leading to a colossal financial crash. But today the Reagan era is enduring in stranger forms than ever.

Republican leaders want to bust unions and give another tax cut to corporations and the rich, plus eliminate taxes on capital gains and inheritance. They want to privatize Social Security, turn Medicare into a voucher program, reduce Medicaid to block grants, and abolish the Affordable Care Act. They want a balanced budget amendment to the Constitution that caps federal spending at 18 percent of the total economy, a figure last reached in 1966. They took the nation hostage in a debt ceiling drama to win an atrocious budget deal. And much of the Republican Party thrives on conspiracy theories about America’s first black president.

It should be politically fatal to lurch so far into a bizarre-world of anti-government ultimatums and related obsessions. But the Republican Party tells a story of our time that many Americans find compelling. It is the Reagan story about a great people being throttled by a voracious federal government. According to this story, government is always the problem, Americans are over-taxed, and America has a debt crisis because Democrats overgrew the government. Every Republican contender for president tells this story;notwithstanding that Americans are not over-taxed and it was chiefly the Republican Party that exploded the debt.

From the early 1970s through the 1990s, Americans averaged 27 percent of their income on federal, state, and local taxes. Today that figure is 23 percent, a 53-year low. As a percentage of GDP, American taxation is at its lowest level since 1950, 14.8 percent—well below the take of other wealthy nations.

More importantly, the debt problem is a byproduct of tax policies that have fueled massive inequality since the early 1980s. It cannot be solved with any moral decency without rectifying the legacy of Ronald Reagan, who led the Republican Party and many Democrats into temptation by contending that deficits don’t matter because tax cuts pay for themselves. When Reagan took office in 1981 the national debt was $907 billion and America was the world’s leading creditor nation. In eight years Reagan tripled the national debt and turned America into the world’s leading debtor nation. Reagan slashed the marginal tax rate from 70 percent to 28 percent, and the top rate on capital gains from 49 percent to 20 percent, fueling a blowout for inequality. George H. W. Bush, vowing to maintain Reagan’s winning approach, let the debt escalate to almost $4 trillion, which scared him enough to break his vow, raise the marginal rate to 35 percent, demoralize his party, and lose a second term.

The only break in America’s post-1980 record of escalating debt was the Clinton administration, which raised the marginal rate to 39.6 percent and rang up budget surpluses of $70 billion in 1998, $124 billion in 1999, and $237 billion in 2000. Had the U.S. stuck with Clinton’s fiscal policy, the cumulative budget surplus would have reached $5.6 trillion by 2011, wiping out the national debt.

George W. Bush quickly squandered all of that. His tax cuts blew a $2 trillion hole in the deficit. He charged the expenses for two wars, officially over $1 trillion, with long-term costs that will triple that figure. He added a $1 trillion Medicare prescription drug benefit without paying for it either, creating the first entitlement in American history lacking a revenue source. Then the casino economy that Clinton and Bush deregulated crashed. In eight years the Bush administration piled up new debt and accrued obligations of $10.35 trillion, and doubled the national debt from $5.7 trillion to $11.3 trillion. Bush amassed more debt in eight years than America’s previous forty-two presidents combined, and the record keeps growing, as three-quarters of the debt amassed on Obama’s watch is the outgrowth of Bush’s unpaid tax cuts, unpaid wars, and unpaid drug benefit, and much of the rest is cleanup for the financial crash.

Obama inherited a deflating economy teetering on an outright depression, a skyrocketing debt, and two wars. When he took office the economy was shrinking by six percent annually. Had these losses continued, the U.S. would have been in a depression within nine months of his inauguration.

Obama averted a depression with a modest, under-funded stimulus that Republicans condemned as outrageously radical, Socialist, and un-American. This absurd position enabled Republicans to win a huge political windfall, which has made the Republican Party crazier than ever.

Mitt Romney proposes to cut income tax rates by 20 percent and the corporate rate by 10 points, plus abolish the estate tax. Rick Santorum proposes to cut the marginal rate by 7 points, reduce the number of tax brackets from six to two, cut the corporate rate in half to 17.5 percent, and eliminate the estate tax and corporate taxes in the manufacturing sector. Newt Gingrich proposes to install a 15 percent flat tax for income and to abolish the capital gains tax, so one-percenters like Romney could pay no taxes at all instead of 14 percent. All of these plans wildly exceed George W. Bush’s disastrous cuts of 4 percent in the marginal rate and 5 percent in capital gains, with no compensating proposals to eliminate shelters and loopholes. All would reduce federal tax revenue by at least 40 percent.

We are supposed to rest assured that Republicans would find savings by breaking America’s social contracts on Medicare, Medicaid, and Social Security. But Americans support Medicare by 85 percent, and over two-thirds believe that the wealthy should pay more taxes. This is the year, and the election, in which the Reagan era really needs to be ended.

gdorrien@uts.columbia.edu'

Gary Dorrien is the Reinhold Niebuhr Professor of Social Ethics at Union Theological Seminary and Professor of Religion at Columbia University. The latest of his 16 books is Kantian Reason and Hegelian Spirit: The Idealistic Logic of Modern Theology (Wiley-Blackwell), which won the Association of American Publishers’ PROSE Award for the best book in Theology and Religious Studies of 2012. He is currently writing a two-volume work on the black Social Gospel tradition.