Daniel Hannan is stirring up some fuss with his launch of a British version of the US Tea Parties. Let's ignore the contradiction of creating a British version of an organisation named after a revolt against Britain, and look at what Hannan is saying. The following is an initial report on ConservativeHome by one of the site's editors, Jonathan Isaby:
He [Hannan] referred to the time when Ronald Reagan was asked how he could justify cutting taxes when the deficit was so large, and he recalled the President's reply:
"I'm not worried about the deficit - the deficit is big enough to look after itself".
In other words, if you bring down taxes there will be economic growth, revenues will rise and the deficit will be reduced. Reagan took a massive gamble, he recalled, and it worked, with Margaret Thatcher doing much the same thing in Britain. "We have lost sight of that wisdom," he lamented.
Now hold on a minute, Reagan's policy did not work. Search the internet for "us deficit" and you'll get an image like the following:
This clearly shows that Reagan and the two Bushes (GHW and GW) increased the US deficit, the younger Bush seemed to be extremely profligate and this graphic does not show the bank bailouts which have been inherited by Obama. The graph clearly shows that it was a Democrat, Bill Clinton, who got the deficit under control. Yet Hannan and his proto-Earl Gray Teabaggers claim that Reagan was an economic genius who we should emulate. Someone, please, save us from this lunatic!
The frightening thing is that Hannan's message, that "bring down taxes [and] there will be economic growth" (ie classic, and discredited Laffer Curve theory) is the basis of Osborne's New Economic Model.
The lessons from the Reagan years are that if we have Osborne in control of the economy, the £178 billion deficit that we have now will be looked upon by future generations with fond memories of a time when we had some deficit control.