Reagan to Senate Leader on Debt Ceiling in 1983: Default Would Lead to ‘Incalculable Damage’

art-letter-reagan-debt-ceilingToday’s Republicans give lip service to Ronald Reagan as if he were the paragon of tea party conservatism, but they conveniently ignore his actual record, particularly the fact that, as president, he raised taxes at least seven times, including the largest corporate tax in history, and, as governor of California, one of his first acts was to raise state taxes by $1 billion, which is roughly $6.5 billion today.

No doubt these same Republicans will also ignore the fact that, in 1983, Pres. Reagan strongly advocated raising the debt ceiling when the United States was undergoing an economic crisis similar to the one facing the country today. Back then, in a letter [PDF]to Senate Majority Leader Howard Baker, R-Tenn., Reagan wrote:

Denigration of the full faith and credit of the United States would have substantial effects on the domestic financial markets and on the value of the dollar in exchange markets. The Nation can ill afford to allow such a result. The risks, the costs, the disruptions and the incalculable damage lead me to but one conclusion: the Senate must pass this legislation before the Congress adjourns.

The reason that Republicans, particularly the tea baggers, ignore Reagan’s actual record is because facts don’t matter, especially if the facts get in the way of their prime objective: doing whatever it takes, including blowing up the world’s financial markets, in order to ensure that Mitt Romney is the next president of the United States.

The text of Reagan’s letter to Baker, urging him to support the vote in Congress is transcribed in full below.

The White House

Washington

November 16, 1983

Dear Howard:

This letter is to ask for your help and support, and that of your colleagues, in the passage of an increase in the limit on the debt ceiling.

As [Treasury] Secretary [Don] Regan has told you the Treasury’s cash balances have reached a dangerously low point. Henceforth, the Treasury Department cannot guarantee that the Federal Government will have the sufficient cash on any one day to meet all of its mandated expenses, and thus the United States could be forced to default on its obligations for the first time in its history.

The country now possesses the strongest credit in the world. The full consequences of a default — or even the serious prospect of a default — by the United States are impossible to predict and awesome to contemplate. Denigration of the full faith and credit of the United States would have substantial effects on the domestic financial markets and on the value of the dollar in exchange markets. The Nation can ill afford to allow such a result. The risks, the costs, the disruptions and the incalculable damage lead me to but one conclusion: the Senate must pass this legislation before the Congress adjourns.

I want to thank you for your immediate attention to this urgent problem and for your assistance in passing an extension of the debt ceiling.

Sincerely,

Ronald Reagan

Hat tip to The Dish.

7 Responses »

  1. Bamboo Harvester July 7, 2011 @ 12:22 am

    The Washington Post:

    President Obama is pressing congressional leaders to consider a far-reaching debt-reduction plan that would force Democrats to accept major changes to Social Security and Medicare in exchange for Republican support for fresh tax revenue.

    2012 ~ END THE MINSTREL SHOW !

  2. Thomas R Arnold July 7, 2011 @ 5:53 am

    The Repubs will DEMAND the changes to Social Security and Medicare, and then they will renege on the fresh tax revenue!

  3. [...] are noting, conservative icon Ronald Reagan is to the left of most prominent Republicans today (via Pensito Review). Today’s Republicans give lip service to Ronald Reagan as if he were the paragon of tea party [...]

  4. [...] are noting, conservative icon Ronald Reagan is to the left of most prominent Republicans today (via Pensito Review). Today’s Republicans give lip service to Ronald Reagan as if he were the paragon of tea party [...]

  5. Jim July 7, 2011 @ 1:14 pm

    Please explain every single democratic party senator voting against raising the debt ceiling, while making Tea Party like pleas for fiscal sanity in their speeches.

    http://1.usa.gov/jxcgpP

    I’m sure you can come up with some excuse if you work hard at it.

  6. Jon July 7, 2011 @ 1:22 pm

    Sure, Jim. That’s an easy one. That Dems voted against raising the debt ceiling when Bush and the GOP Congress did it five times in the previous decade because the Republicans were borrowing money like drunken sailors from the Chinese communists to pay for their unfunded tax cuts for the wealthy, their unfunded wars in Afghanistan and Iraq and their unfunded Medicare benefit.

    The difference now is that we are forced to raise the debt ceiling because Bush and the GOP crashed the economy in the last decade, which cost the taxpayer billions of dollars.

  7. cornelius July 18, 2011 @ 6:31 am

    Can we just forget who did what when and worry about what is going on today?

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