Current Events — HabitableZone

Current Events » in reply to Yeah, I remember the allocades the Democrats gave him for that...

Ah yes, those were the days...
Greg — (archived)

David A. Stockman served as Director of the Office of Management and Budget (OMB) during former President Reagan's first term. President Reagan's platform advocated cutting taxes, eliminating wasteful Government programs, balancing the Federal budget by 1984, and a stronger United States military. Congressmen, Senators, lobbyists and President Reagan's staff members all had differing priorities. In "The Triumph of Politics: ..." Mr. Stockman discusses an endless stream of strategies and legislative compromises designed to implement President Reagan's platform. Tax cuts are passed, existing programs are cut, and the military is strengthened. But the Federal budget never is balanced because tax increases were forbidden and the compromises placed off-limits many expensive Government programs. The result is troubling. Former President Carter's proposed 1986 budget would have included an $80 billion deficit (pg. 358). In April 1983 President Reagan's budget "guaranteed $200 billion per year of deficits for the foreseeable future" (pg. 370) that will "consume two-thirds of the nation's net private savings to fund the federal deficit" (pg. 378) and require "$100 billion per year inflow of foreign capital to finance our twin deficits -- trade and the federal budget." (pg. 379). Mr. Stockman believed this huge recurring deficit was not sustainable and that compensating tax increases were not politically acceptable. Mr. Stockman left Government after President Reagan's re-election. ... The stongest feature of the book is Stockmans admission and exposition of the fact that even if all of the spending cuts he asked for were enacted, triple digit deficits would have accumulated anyway. Moreover, the foolish Rosy scenario assumption (which was the real cause of the deficits) boggles the mind and I credit Stockman for fessing up to it. It is astounding that such intelligent men thought they could create unprecedented economic growth overnight, and then had the nerve to base the federal budget on such assumptions. Unfortunately the current president fell into this same trap, at least in part, during the tax cut debate this spring. (Nearly every economist except those in OMB and CBO realizes that the surpluss projections were nonsense.)

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