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Ed Hudgins

Was Ayn Rand Wrong on Reagan?

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Was Ayn Rand Wrong on Reagan?
By Edward Hudgins
February 06, 2017

Hardcore anti-Communist Ayn Rand was, to the surprise of many who did not live through those days, not a fan of hardcore anti-Communist Ronald Reagan. But Rand died in 1982, only a year into Reagan’s presidency. So on the occasion of his birthday, let’s ask why Rand didn’t like Reagan and whether, if she had lived, she would have reevaluated her opinion of the Gipper.

Fear of the Religious Right

Rand found strong fault principally with Reagan’s alliance with the emerging Religious Right. She said that “the appalling disgrace of his administration was his connection with the so-called ‘Moral Majority’ and sundry other TV religionists, who are struggling, apparently with his approval, to take us back to the Middle Ages via the unconstitutional union of religion and politics.” Most notably, Rand rejected Reagan’s opposition to legal abortion.

But what really happened to all those campaign promises?  In retrospect, Reagan mostly offered rhetoric and did little to make the Religious Right agenda his political priority. His energies went into two goals. First, he wanted to roll back the Soviet bloc, and thus the threat of nuclear war, rather than resigning himself, as his predecessors had, to containing its expansion. And second, he wanted to roll back the power and scope of the federal government.

The Evil Empire

Rand would certainly have approved of his labeling the Soviet Union as an “Evil Empire.” He saw the Cold War not simply in geopolitical terms but, rather, in moral terms. In 1987, Reagan famously stood before the barrier in Berlin meant to keep the people from Communist East Germany from escaping to West Germany, and demanded of the Soviet leader, “Mr. Gorbachev, tear down this wall.”  But remember, this was five years after Rand died.  She didn’t have this context when she made her evaluations of Reagan.

His pronouncements and those of British Prime Minister Margaret Thatcher defined the conflict in moral terms. The words of those leaders gave courage to those in Russia and other countries under the boot of Communism from the knowledge that they had allies who understood the essence of the conflict, who would not acquiesce in evil, and who supported their aspirations for liberty.

Preventing nuclear war

Reagan also saw as his highest goal the protection of the United States from a nuclear attack… (Continue reading here.)

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2 hours ago, Ed Hudgins said:

Was Ayn Rand Wrong on Reagan?
By Edward Hudgins
February 06, 2017

 

 

Hardcore anti-Communist Ayn Rand was, to the surprise of many who did not live through those days, not a fan of hardcore anti-Communist Ronald Reagan. But Rand died in 1982, only a year into Reagan’s presidency. So on the occasion of his birthday, let’s ask why Rand didn’t like Reagan and whether, if she had lived, she would have reevaluated her opinion of the Gipper.

 

 

Fear of the Religious Right

 

 

Rand found strong fault principally with Reagan’s alliance with the emerging Religious Right. She said that “the appalling disgrace of his administration was his connection with the so-called ‘Moral Majority’ and sundry other TV religionists, who are struggling, apparently with his approval, to take us back to the Middle Ages via the unconstitutional union of religion and politics.” Most notably, Rand rejected Reagan’s opposition to legal abortion.

 

 

But what really happened to all those campaign promises?  In retrospect, Reagan mostly offered rhetoric and did little to make the Religious Right agenda his political priority. His energies went into two goals. First, he wanted to roll back the Soviet bloc, and thus the threat of nuclear war, rather than resigning himself, as his predecessors had, to containing its expansion. And second, he wanted to roll back the power and scope of the federal government.

 

 

The Evil Empire

 

 

Rand would certainly have approved of his labeling the Soviet Union as an “Evil Empire.” He saw the Cold War not simply in geopolitical terms but, rather, in moral terms. In 1987, Reagan famously stood before the barrier in Berlin meant to keep the people from Communist East Germany from escaping to West Germany, and demanded of the Soviet leader, “Mr. Gorbachev, tear down this wall.”  But remember, this was five years after Rand died.  She didn’t have this context when she made her evaluations of Reagan.

 

 

His pronouncements and those of British Prime Minister Margaret Thatcher defined the conflict in moral terms. The words of those leaders gave courage to those in Russia and other countries under the boot of Communism from the knowledge that they had allies who understood the essence of the conflict, who would not acquiesce in evil, and who supported their aspirations for liberty.

 

 

Preventing nuclear war

 

 

Reagan also saw as his highest goal the protection of the United States from a nuclear attack… (Continue reading here.)

 

 

St.  Ronald and his administration also ran up the largest deficit in U.S.  history and we are still trying (unsuccessfully) to pay it off.

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13 minutes ago, BaalChatzaf said:

[Reagan] and his administration also ran up the largest deficit in U.S.  history and we are still trying (unsuccessfully) to pay it off.

Largest at the time, but Obama's deficits were much larger, even as a percent of GDP.

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45 minutes ago, merjet said:

Largest at the time, but Obama's deficits were much larger, even as a percent of GDP.

I sit corrected. But St. Ronald was the first to dig a hole so deep we cannot get out of it.  Others have only made it deeper.

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Federal revenues under Reagan rose from $600 billion in 1981 to $910 billion in 1988 with tax cuts. The problem is that Federal spending continued to grow as well. I'm glad he cut taxes in order to let people keep more of their own money. One of my criticisms of Reagan is that he didn't use the veto pen enough.

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7 hours ago, BaalChatzaf said:

St.  Ronald and his administration also ran up the largest deficit in U.S.  history and we are still trying (unsuccessfully) to pay it off.

There is no debt to pay off. That's because it's in the US dollar which the US can make at will.

--Brant

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6 hours ago, BaalChatzaf said:

I sit corrected. But St. Ronald was the first to dig a hole so deep we cannot get out of it.  Others have only made it deeper.

What hole?

--Brant

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1 hour ago, Brant Gaede said:

What hole?

--Brant

The U.S. government cannot possibly raise enough revenue by taxes to pay off the national debt and deficit or at least get down to a reasonable size.

The government will have to create money out of thin air,  which it already does.   

Strange to say,  that is not necessarily a bad thing.  If the money created by the usual manipulation of opening accounts at the Federal Reserve and writing checks on them actually goes to create the means to produce the goods and services that money can really buy,  then the effect is actually beneficial and not a run-away inflation such as  wrecked  Germany under the Weimar Republic. 

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6 hours ago, BaalChatzaf said:

The U.S. government cannot possibly raise enough revenue by taxes to pay off the national debt and deficit or at least get down to a reasonable size.

The government will have to create money out of thin air,  which it already does.   

Strange to say,  that is not necessarily a bad thing.  If the money created by the usual manipulation of opening accounts at the Federal Reserve and writing checks on them actually goes to create the means to produce the goods and services that money can really buy,  then the effect is actually beneficial and not a run-away inflation such as  wrecked  Germany under the Weimar Republic. 

Germany suffered its runaway inflation because it had debts not in its own currency.

The US debt is money already spent. Just roll it over.

Actually retiring the overall debt would create a huge, deflationary impulse throughout the economy.

Why you have the idea that debt must be retired I have no idea except it's common--and exploitable in equity and FOREX markets.

--Brant

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4 hours ago, Brant Gaede said:

Germany suffered its runaway inflation because it had debts not in its own currency.

The US debt is money already spent. Just roll it over.

Actually retiring the overall debt would create a huge, deflationary impulse throughout the economy.

Why you have the idea that debt must be retired I have no idea except it's common--and exploitable in equity and FOREX markets.

--Brant

I have come to the conclusion that the debt need not be retired.  But it has to be kept under control.  If more money is created than that can generate the production of new goods and services  or but the goods and services  already available,  then we have  runaway price inflation.  That is bad. 

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44 minutes ago, BaalChatzaf said:

I have come to the conclusion that the debt need not be retired.  But it has to be kept under control. 

I agree. Short-term debt, because federal revenues by month are lumpy, is okay. The long-term stuff is more bothersome, unless there is a specific revenue source, e.g. tolls on roads, to pay off the debt created up-front, e.g. by building the toll road.  

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2 hours ago, merjet said:

I agree. Short-term debt, because federal revenues by month are lumpy, is okay. The long-term stuff is more bothersome, unless there is a specific revenue source, e.g. tolls on roads, to pay off the debt created up-front, e.g. by building the toll road.  

Or the made up from thin air money results in the production of goods and services which can then be bought with that money.  Proper investment based on "future money"  redeems the creation of the money.

I think the right way to look at money is to regard it as a catalyst that leads to production of goods and services and their exchange through commerce.

Like any good catalyst a process is caused to happen without consuming the catalyst.  I prefer this view of money to the classic store of value view.  If the catalytic reaction leads to the increase of goods and services and promotes their exchange it does not matter whether the money is gold coins or data in a computer file or even -- heaven forefend--- bit coins. 

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On 2/6/2017 at 9:48 PM, BaalChatzaf said:

The U.S. government cannot possibly raise enough revenue by taxes to pay off the national debt and deficit or at least get down to a reasonable size.

The government will have to create money out of thin air,  which it already does.   

Strange to say,  that is not necessarily a bad thing.  If the money created by the usual manipulation of opening accounts at the Federal Reserve and writing checks on them actually goes to create the means to produce the goods and services that money can really buy,  then the effect is actually beneficial and not a run-away inflation such as  wrecked  Germany under the Weimar Republic. 

The reasonable size is what it is. Fleeing US debt is fleeing the dollar and is the cart following the horse. If you want to get your money back at your bond's maturity the US government will create an electronic entry into your bank account with a snap of its fingers, just like it does on a regular basis. THEN WHAT ARE YOU GOING TO DO WITH THAT MONEY? Maybe buy Treasuries at a higher rate of interest. Or a lower rate. It depends.

It is not the size of the debt. It's the deficit spending and how every extra buck the government is putting into the economy is having less and less effect on economic activity through the law of diminishing returns applied to mal-investments.

Taxes need to be cut--get rid of capital gains taxes and deregulate the economy and eliminate government agencies--even get rid of corporate taxation on income altogether (it's double taxation on income). Shrink the size of government. Doing the last means taking public money out of the private economy so the other things need doing to compensate making the private economy bigger. Make depreciation a one-year event.  Above all interest rates need to go up to properly reflect the time value of money which will help eliminate mal-investments.

--Brant

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