The "Two Santas" Strategy: A Fact-Check

The article in question is a widely-circulated essay by progressive author and radio host Thom Hartmann, republished by the Milwaukee Independent in November 2022^[1]. Its thesis: that since the 1970s the Republican Party has followed a deliberate "Two Santa Clauses" strategy — spend and cut taxes lavishly when in power to look generous and run up debt, then pose as horrified deficit hawks the moment a Democrat takes office, forcing Democrats to cut their own social programs.

  <p>This is an <strong>opinion essay built on historical claims</strong>, not a neutral report — so the fair test is not "is the framing the only possible reading?" (it isn't) but "are the factual building blocks accurate?" We checked the load-bearing ones. The verdict scale below runs <span>TRUE</span> · <span>MOSTLY TRUE</span> · <span>PARTLY TRUE / MIXED</span> · <span>FALSE</span>.</p>

  <h2>1 · The origin story: Wanniski &amp; the "Two Santa" memo</h2>

  <div>
    <div>
      <span>Mostly True</span>
      <span>"Republican strategist Wanniski first proposed his Two Santa Clauses strategy in The Wall Street Journal in 1974."</span>
    </div>
    <p><strong>The person and the idea are real; the date and venue are wrong.</strong> Jude Wanniski was a genuine, influential conservative writer, and the "Two Santa Claus Theory" is his actual idea — he later bragged about authoring it.<sup><a href="#s2">[2]</a></sup> But his essay <em>"Taxes and a Two-Santa Theory"</em> was published in <strong>1976 in the <em>National Observer</em></strong> (a Dow Jones weekly), not in <em>The Wall Street Journal</em> in 1974.<sup><a href="#s2">[2]</a></sup><sup><a href="#s3">[3]</a></sup> The essay's own epigraph correctly dates Wanniski's famous "failure of the Republican Party to play Santa Claus" line to <strong>March 6, 1976</strong><sup><a href="#s1">[1]</a></sup> — so the body text contradicts the article's own header by two years.</p>
    <p>The kernel of truth behind the mix-up: Wanniski <em>was</em> an associate editor at the <em>WSJ</em> and used its editorial pages to evangelize tax cuts starting in 1974. So "Wanniski + WSJ + tax-cut advocacy + mid-1970s" is broadly right; the specific citation for the "Two Santa" memo is not.</p>
  </div>

  <h2>2 · Supply-side and the Laffer napkin</h2>

  <div>
    <div>
      <span>Partly True</span>
      <span>"In 1974 Wanniski invented a new phrase — 'Supply-Side Economics.'"</span>
    </div>
    <p>Wanniski is widely credited with <strong>popularizing and naming</strong> supply-side economics — that part is fair.<sup><a href="#s2">[2]</a></sup> But the coinage is generally dated to <strong>1976</strong>, not 1974, and the term's parentage is contested: economist Herbert Stein used "supply-side fiscalists" around the same time. Calling it a 1974 Wanniski invention overstates a genuinely murkier record.</p>
  </div>

  <div>
    <div>
      <span>False</span>
      <span>"Arthur Laffer … shared [the Laffer Curve napkin] with Reagan over lunch."</span>
    </div>
    <p><strong>This is the clearest error in the piece.</strong> The legendary napkin was sketched at a 1974 dinner at the Two Continents restaurant in Washington — and the people across the table were White House officials <strong>Dick Cheney and (by most accounts) Donald Rumsfeld</strong>, with journalist Jude Wanniski present. <strong>Ronald Reagan was not there</strong>; in 1974 he was still governor of California.<sup><a href="#s4">[4]</a></sup><sup><a href="#s5">[5]</a></sup> Wanniski named it the "Laffer Curve" and gave it to history. (A further wrinkle: Laffer himself has said he doesn't remember drawing it and that the restaurant had cloth napkins, so the artifact's literal existence is disputed too.<sup><a href="#s6">[6]</a></sup>) The idea reached Reagan and shaped his 1981 tax cuts — but not via a lunch napkin handed to him personally.</p>
  </div>

  <h2>3 · The debt record under Reagan, Bush &amp; Trump</h2>

  <p>The essay's numbers here are <strong>directionally accurate but loosely rounded.</strong> The underlying fact — debt rising sharply under three self-described fiscally-conservative Republican presidents — is solid. The exact percentages drift.</p>

  <table>
    <thead>
      <tr><th>Claim in essay</th><th>Treasury record</th><th>Verdict</th></tr>
    </thead>
    <tbody>
      <tr>
        <td>Reagan "more than tripled" the debt; a "218% increase" ($800B → $2.6T).</td>
        <td>Debt rose <strong>~186%</strong> on the standard fiscal-year measure ($998B → $2.86T); ~225% on the $800B→$2.6T endpoints the essay itself uses. "Nearly tripled," not quite tripled.<sup><a href="#s8">[8]</a></sup></td>
        <td>MOSTLY TRUE</td>
      </tr>
      <tr>
        <td>Bush "nearly doubled" the debt, "86% to over $10 trillion."</td>
        <td>Debt roughly doubled, ~<strong>83–86%</strong> over Bush's tenure (to ~$10.6T by Jan 2009). Accurate.<sup><a href="#s8">[8]</a></sup></td>
        <td>TRUE</td>
      </tr>
      <tr>
        <td>Trump "raised our national debt by almost $7 trillion."</td>
        <td>Actually ~<strong>$7.8 trillion</strong> (≈$19.9T → $27.75T). The essay <em>understates</em> it.<sup><a href="#s8">[8]</a></sup></td>
        <td>TRUE</td>
      </tr>
      <tr>
        <td>"$31 trillion today" (writing in Nov 2022).</td>
        <td>The debt crossed $31T in early October 2022. Correct for its moment.<sup><a href="#s8">[8]</a></sup></td>
        <td>TRUE</td>
      </tr>
    </tbody>
  </table>

  <div>
    <div>
      <span>Mixed</span>
      <span>"$31 trillion today, 100% of which tracks back to Reagan's, Bush Jr.'s, and Trump's massive tax cuts and Bush's two … wars."</span>
    </div>
    <p>The <em>direction</em> is supported by mainstream budget analysis, but "100%" is rhetorical, not literal. The Center on Budget and Policy Priorities estimates the Bush and Trump tax cuts are responsible for about <strong>57% of the rise in the debt ratio since 2001</strong> — and <strong>more than 90%</strong> once you strip out one-time recession and COVID costs.<sup><a href="#s9">[9]</a></sup> That's a striking, well-evidenced figure that <em>does</em> make tax cuts the single largest driver. But it covers 2001 onward (not Reagan), it's a share of the <em>debt-to-GDP ratio</em> (not the raw dollar total), and it isn't 100%. The essay's instinct is right; its precision is invented.</p>
  </div>

  <h2>4 · "Deficits don't matter"</h2>

  <div>
    <div>
      <span>True</span>
      <span>Cheney "famously said … 'Reagan proved deficits don't matter. We won the midterms. This is our due.'"</span>
    </div>
    <p><strong>Accurately quoted.</strong> The line is documented in Ron Suskind's 2004 book <em>The Price of Loyalty</em>, drawn from former Treasury Secretary Paul O'Neill's records: in a 2002 meeting, when O'Neill warned about growing deficits, Cheney cut him off — "Reagan proved deficits don't matter… We won the midterms. This is our due." O'Neill was pushed out weeks later.<sup><a href="#s10">[10]</a></sup> This is the essay's strongest single piece of evidence, and it checks out.</p>
  </div>

  <h2>5 · The Democratic half: Clinton &amp; Obama</h2>

  <div>
    <div>
      <span>Partly True</span>
      <span>Clinton, "in his second inaugural address, [declared] an 'end to the era of big government.'"</span>
    </div>
    <p><strong>Right quote, wrong speech.</strong> Clinton did say "the era of big government is over" — but in his <strong>State of the Union address on January 23, 1996</strong>, not his second inaugural (which came a year later, in January 1997).<sup><a href="#s7">[7]</a></sup> The broader claims around it are sound: Clinton did raise taxes, move to balance the budget, and sign welfare reform ("end welfare as we know it") — the "Democrat governs as a deficit hawk" pattern the essay describes.</p>
  </div>

  <div>
    <div>
      <span>Mostly True</span>
      <span>Republicans "convinced a sitting Democratic president to propose a cut to Social Security (the 'chained CPI'). Obama nearly shot the Democrats' biggest Santa Claus … until outrage from the Democratic base stopped him."</span>
    </div>
    <p>Accurate in substance. Obama's FY2014 budget did include "chained CPI," a slower inflation measure that would have trimmed Social Security cost-of-living increases over time, offered as part of a deficit "grand bargain." It drew fierce blowback from Democrats and progressive groups and was abandoned. The framing ("shoot Santa Claus") is the author's; the events are real.</p>
  </div>

  <h2>6 · The debt-ceiling pattern</h2>

  <div>
    <div>
      <span>Mostly True</span>
      <span>Debt-ceiling brinkmanship happens under Democratic presidents (Clinton, Obama, Biden) but "never once happened" under Reagan, the Bushes, or Trump.</span>
    </div>
    <p>The modern, economy-threatening <em>standoffs</em> do cluster as the essay says: the near-default crises of <strong>1995–96 (Clinton), 2011 and 2013 (Obama), and 2023 (Biden)</strong> — two of which triggered the only U.S. credit downgrades in history — all pitted Republican congressional majorities against Democratic presidents.<sup><a href="#s12">[12]</a></sup> The caveat: routine debt-ceiling increases happen under both parties (Reagan raised it ~18 times), and the out-party often casts symbolic "no" votes regardless of who's president — Obama himself voted against a hike under Bush in 2006. So it's the <em>weaponization into a default threat</em>, not partisan grumbling generally, that fits the pattern — and on that narrower point the essay is right.</p>
  </div>

  <h2>7 · The $50 trillion and the unions</h2>

  <div>
    <div>
      <span>True</span>
      <span>Republicans "transferred over $50 trillion from working class families into the money bins of the top one percent."</span>
    </div>
    <p>This tracks a real, widely-cited <strong>2020 RAND Corporation study</strong> (Carter Price &amp; Kathryn Edwards) finding that roughly <strong>$47 trillion</strong> in income shifted from the bottom 90% to the top 1% between 1975 and 2018 — about $2.5 trillion a year by 2018.<sup><a href="#s11">[11]</a></sup> Headlines rounded it to "$50 trillion." Note the study measures <em>income distribution overall</em>, not a transfer caused solely by Republicans — the essay attributes to one party what the researchers describe as a bipartisan, decades-long structural shift.</p>
  </div>

  <div>
    <div>
      <span>Partly True</span>
      <span>Union representation fell "from around a third of workers when Reagan came into office to around 6 percent of the non-governmental workforce today."</span>
    </div>
    <p><strong>The endpoint is right; the starting point is inflated.</strong> Private-sector union membership today is indeed about <strong>6%</strong>.<sup><a href="#s13">[13]</a></sup> But overall union membership when Reagan took office (1981) was roughly <strong>20%</strong>, not a third — the BLS series begins at 20.1% in 1983.<sup><a href="#s13">[13]</a></sup> The "one-third" figure describes the 1950s peak, two decades before Reagan. The decline is real and steep; the magnitude is overstated by the chosen baseline.</p>
  </div>

  <h2>8 · Overall verdict &amp; the case against</h2>

  <p>On the central question — <em>did a Republican strategist actually articulate a "spend in power, panic about debt out of power" strategy, and has the GOP broadly followed that pattern?</em> — the answer is <strong>yes, and it's unusually well-documented for a "conspiracy."</strong> Wanniski wrote the playbook under his own name; Cheney said the quiet part out loud; the debt record and the debt-ceiling crisis timeline match. That's why this essay has circulated for over a decade: its spine is true.</p>

  <p>What it gets wrong are <strong>specifics and certainty</strong> — a misdated memo, a napkin handed to the wrong man, a quote in the wrong speech, percentages rounded past the data, and a "100%"-style causal precision the evidence doesn't license.</p>

  <div>
    <h3>The strongest case against the essay's framing</h3>
    <p>A fair skeptic would push on three things, and they deserve airing:</p>
    <p><strong>1. "Deliberate 40-year conspiracy" overshoots the evidence.</strong> That Wanniski wrote a strategy memo and some politicians liked it is not proof that every subsequent GOP deficit was a coordinated, intentional plot. Much of the debt also came from recessions, wars, demographics, and bipartisan spending — drivers a single-villain narrative flattens.</p>
    <p><strong>2. It's one-sided by construction.</strong> Both parties have raised debt and both have cut deals; Democrats expanded deficits too (the RAND $50T shift spans Democratic administrations as well). The essay assigns to Republicans alone a trend its own cited source treats as structural.</p>
    <p><strong>3. Supply-side has real defenders.</strong> Dismissing it as self-evidently "colossal idiocy" is the author's polemic, not a settled finding — economists still debate the growth effects of marginal-rate cuts.</p>
    <p>None of these <em>refutes</em> the documented core: the strategy was written down, the debt rose, the debt-ceiling crises landed on Democratic presidents. They mean the honest reading is "a real, documented political strategy, told as a one-sided morality tale with several factual slips" — not "a debunked myth," and not "gospel."</p>
  </div>

  <p>Methodology: claims were checked against primary and authoritative-secondary sources (U.S. Treasury debt records, BLS union data, RAND, CBPP, the Smithsonian, the Miller Center). Where the essay's own internal dates conflicted (e.g. the 1976 epigraph vs. the "1974" body claim), the verifiable record was treated as canonical. Derived percentages were recomputed from the underlying dollar figures rather than taken from the essay.</p>