On February 24, 1984, Richard Cohen of The Washington Post excoriated then President Ronald Reagan over a $200 Billion budget deficit and called on President Reagan to surrender his credit card. The following text is Mr. Cohen’s attempt to shift a fiscal responsibility that ultimately fell to Tip O’Neil and the Democrats who controlled, of all things, the U.S. House of Representatives.
Dear Ronald Reagan: As you know we have written you previously about your PAST DUE deficit and have yet to get a satisfactory response. This is our final letter. We know your credit rating is important to you and so we are taking this opportunity to review your financial situation. Immediate attention to this problem is required or we will have to take FURTHER ACTION.
When you first contacted this office in 1980, you said you would be able to lower taxes, increase defense spending and balance the budget. This office had grave doubts about your plan, but we allowed you to proceed anyway because YOUR BUSINESS IS IMPORTANT TO US.
But Mr. Ronald Reagan, you have not been able to balance the budget. According to our figures, your budget will be short $200 billion by the end of fiscal 1985. If this sum is added to previous deficits, we are talking of a debt approaching a trillion dollars. Mr. Ronald Reagan, we value your business, but YOU HAVE DONE NOTHING TO BRING YOUR BUDGET INTO BALANCE.
Mr. Ronald Reagan, in 1980 you said you would balance the budget. Every year since, you have made the same claim. Not only did you fail to balance the budget as promised, but also the budget you recently submitted to this office shows AN ADDITIONAL DEFICIT. As usual, you say you will attend to this problem NEXT YEAR.
Mr. Ronald Reagan, we have been very patient with you, but look at what you have done. The government has to borrow its funds somewhere and it will be competing with others for the limited money available. This either will keep interest rates at the current high level, or increase them further. As you know, Mr. Ronald Reagan, the cost of borrowing money (interest rates) is reflected in the price of almost everything–from new cars to new houses.
But additionally, Mr. Ronald Reagan, a perusal of your statements indicates that YOU DO NOT KNOW WHAT YOU ARE DOING. We are sorry for being so blunt, but this office has gone over your books and discovered that you are now spending more on interest payments than you have cut from social programs for the poor. In other words, Mr. Ronald Reagan, what you have taken from poor people you are now giving to bankers and rich foreign investors.
This office also has concluded, Mr. Ronald Reagan, that high interest rates and the prospect that they will go even higher have attracted a lot of foreign money to this country. We need not tell you that this is not good. The result is that the dollar has increased in value, meaning cheap meals for a privileged few in Paris, but–MORE IMPORTANT–a higher cost for American exports. This means that American firms that do business abroad are being priced out of the market. At the same time, foreign firms now are able to sell here more cheaply. This accounted for a $60.6 billion trade deficit in 1983 and a projected deficit of $100 billion for 1984.
Mr. Ronald Reagan, we have written to you repeatedly about these matters and all we get back is promises that the budget will be balanced–but the promise always is for NEXT year. This is unacceptable to us. While normally we refrain from telling clients how to conduct their business, it seems obvious to us that you cannot continue both to spend the way you have on defense and also permit the rich to avoid paying their fair share of taxes. Your figures indicate, after all, that the rich enjoyed the major share of your tax reductions. A little corporate tax would not hurt, either.
In the end, Mr. Ronald Reagan, these choices are UP TO YOU. But we cannot continue to finance your debt or continue to rely on your promises that next year you will balance the budget. This, then, is your FINAL WARNING. You have refused to respond adequately to previous letters. Therefore, we must inform you that your request for another $200 billion loan is DENIED.
We are sorry to have taken such stern measures. We always have valued your business, but we feel that you have taken advantage of the LIBERAL CREDIT POLICIES extended to your predecessors. Remember, your credit rating is important to you. But frankly, Mr. Ronald Reagan, you don’t have one anymore.
In terms of 2011 dollars, that would be like asking for a debt limit raise of $434 billion dollars and adding that to a national deficit of $2 trillion dollars. But in reality, today’s establishment is asking for an additional $2 trillion dollars to add to a $15 trillion dollar deficit.
If the 1984 liberal establishment of Washington D.C. called Reagan a deadbeat for a $434 billion dollar debt limit increase (in terms of 2011 dollars) and called for a revocation of his credit privileges, what shall we say about President Barack Obama, Nancy Pelosi and Harry Reid?