INVOKING REAGAN: MCCAIN'S DEBT-CEILING ARGUMENT

posted by Michael Chihak

By his own admission, Arizona Republican Sen. John McCain's strength is not the economy. Yet he discusses it in a way that makes one think he is expert in the field.

Take this interesting exchange he had with Democratic Sen. Dick Durbin of Illinois on the U.S. Senate floor Sunday during part of the ongoing debt-ceiling debate.

McCain asked Durbin to recall the year 1982, which is when they both first were elected to the U.S. House of Representatives, in the midterm elections of President Ronald Reagan's first term. In one of their first actions in the new term, McCain recalled, according to the Chicago Tribune: "We cut taxes. ... We had one of the strongest recoveries in recent history of this country because we didn't start spending and add spending without paying for them."

Durbin, according to the Chicago Tribune, parried: "Does he recall what happened with the Reagan tax cuts? Because what happened was we tripled the national debt during that period of time, and President Reagan came to Congress 18 times to extend the debt ceiling. He holds the record. So to argue the Reagan tax cuts led to great long-term prosperity is seriously in doubt, if we are going to use the deficit as a measure."

As many an economist has noted, Reagan's tax cuts did not do what Reagan and his economic advisers said they would do -- stimulate the economy through the "trickle-down effect." In fact, after the cuts, the trickle-down effect was a recession.