Friday, July 29, 2011


Yesterday I appeared on Bakersfield's local KGET Channel 17 News to discuss the budget debate going on in Washington.

I appeared with California's Republican king maker, writ large, Mark Abernathy. During the course of our discussion Abernathy spoke about revenues as a percentage of GDP under Reagan. Or at least that's what I heard him say he was talking about.

I wasn't sure where Abernathy was going so I chimed in, reminding him that although Reagan raised taxes (payroll) that revenues as a percentage of GDP actually went down under Reagan. And this was after Reagan promised that tax revenues would go up because of his trickle down economic policies. Abernathy then corrected me, saying he was actually talking about "spending" as a percentage of GDP (I'm waiting for a copy of the tape).

I thought to myself, "Huh ... I heard revenue" but decided to play along.

In fact, I was more than happy to play along and talk about spending as a percentage of GDP under Republican presidents because, quite frankly, they exploded. Unfortunately, we ran out of time, so I couldn't do a proper smack down on Abernathy and his take on spending (or revenues) as a percentage of GDP.

As luck would have it, as if on cue, Barry Ritholtz posted this easy to read spending as a percentage of GDP chart today. It's not good news for Mr. Abernathy.

Long story short? As I was trying to explain, spending as a percentage of GDP went up under President Reagan (which is one of the reasons I wasn't sure where Abernathy was going with his Reagan story). Making matters worse for Abernathy is that (as I was also going to explain), revenues also dropped under Ronald Reagan - as they did under President Bush II.

Now, ask yourself, "What would happen to my household budget if my income dropped while my expenses went up?" This isn't rocket science.

So, why doesn't the GOP understand any of this?

- Mark


  1. When you get a copy of the tape. Can you post it here or to YouTube?

  2. Gary, I hope to have a copy today. If the tech gods are generous I'll have it up tonight.

    - Mark