Philip Klein on federal budget deficits

AmSpec contributor Philip Klein has recently attempted to debunk the myths that “conservatives don’t care about deficits” and that Ronald Reagan increased the deficit. Sadly, he has failed to point out certain facts.

Firstly, contrary to what many liberals, including Matthew Yglesias, claim, Reagan reduced the deficit as a share of GDP. When Reagan became President, the deficit equaled 6% of GDP. By the end of his second term as President (i.e. by the year 1989), it equaled only 3% of GDP.

Secondly, Reagan would’ve balanced the budget if the Congress (whose lower chamber was controlled by the Dems during his entire tenure, as was the Senate during the years 1987-1995) had given him the line-item veto and if it had allowed him to abolish the Education Department and the DOE. Sadly, the Congress rejected most of Reagan’s proposals.

Philip Klein also claimed that:

“Reagan, it’s often said, came into office with the goals of building up the military and winning the Cold War, cutting taxes, and reducing the size of government. He was tremendously successful in the first two areas, but failed to achieve the third goal.”

Actually, no, he did not fail. By Klein’s own admission, Reagan reduced civilian federal spending by 13.5% during his first three fiscal years as President. Moreover, according to, over the 8-year period from 1981 to 1989, Reagan reduced the size of the government from 23.5% of GDP to 21.5% of GDP.

Klein also spoke approvingly of “the post-Cold War/pre-9/11 “peace dividend,” which triggered an historic reduction in military spending.” as a factor which reduced the budget deficit during the 1990s. Although it’s true that it did somewhat reduce the deficit, and it’s true that this reduction of military spending was historically and absolutely huge, the misnamed “peace dividend” (which should be called “the treason dividend”, because that’s what it was) was a foolish mistake. It was such a huge reduction of defense spending (down to 3% of GDP, the lowest level of defense spending since FY1941) that the US military became decrepit and utterly unable to replace its old equipment, modernize its old facilities, or operate enough weapons to protect America from its enemies. By 2000, the Joint Chiefs of Staff were complaining that the defense cuts of the 1990s “mortgaged the future of the military” (to quote the then chairman of the JCS) and said that they needed additional tens of billions of dollars per year just to maintain the military that existed then.

So the “peace dividend” was a folly. Klein’s own AmSpec colleague Quin Hillyer will tell you this. Sarah Palin will tell you this. Mitt Romney will tell you this.

I will write an article on the “peace dividend” when time allows. Today, I’ll just quote the 1997 Statement of Principles of the Project for the New American Century, written during the nadir of the Clinton defense cuts:

have also resisted isolationist impulses from within their own ranks. But conservatives have not confidently advanced a strategic vision of America’s role in the world. They have not set forth guiding principles for American foreign policy. They have allowed differences over tactics to obscure potential agreement on strategic objectives. And they have not fought for a defense budget that would maintain American security and advance American interests in the new century.We aim to change this. We aim to make the case and rally support for American global leadership.

As the 20th century draws to a close, the United States stands as the world’s preeminent power. Having led the West to victory in the Cold War, America faces an opportunity and a challenge: Does the United States have the vision to build upon the achievements of past decades? Does the United States have the resolve to shape a new century favorable to American principles and interests?

We are in danger of squandering the opportunity and failing the challenge. We are living off the capital — both the military investments and the foreign policy achievements — built up by past administrations. Cuts in foreign affairs and defense spending, inattention to the tools of statecraft, and inconstant leadership are making it increasingly difficult to sustain American influence around the world. And the promise of short-term commercial benefits threatens to override strategic considerations. As a consequence, we are jeopardizing the nation’s ability to meet present threats and to deal with potentially greater challenges that lie ahead.

We seem to have forgotten the essential elements of the Reagan Administration’s success: a military that is strong and ready to meet both present and future challenges; a foreign policy that boldly and purposefully promotes American principles abroad; and national leadership that accepts the United States’ global responsibilities.

Of course, the United States must be prudent in how it exercises its power. But we cannot safely avoid the responsibilities of global leadership or the costs that are associated with its exercise. America has a vital role in maintaining peace and security in Europe, Asia, and the Middle East. If we shirk our responsibilities, we invite challenges to our fundamental interests. The history of the 20th century should have taught us that it is important to shape circumstances before crises emerge, and to meet threats before they become dire. The history of this century should have taught us to embrace the cause of American leadership.

Our aim is to remind Americans of these lessons and to draw their consequences for today. Here are four consequences:

• we need to increase defense spending significantly if we are to carry out our global
responsibilities today and modernize our armed forces for the future;

• we need to strengthen our ties to democratic allies and to challenge regimes hostile to our interests and values;

• we need to promote the cause of political and economic freedom abroad;

• we need to accept responsibility for America’s unique role in preserving and extending an international order friendly to our security, our prosperity, and our principles.

Such a Reaganite policy of military strength and moral clarity may not be fashionable today. But it is necessary if the United States is to build on the successes of this past century and to ensure our security and our greatness in the next. “


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