On the Economics of it all

David Stockman was Director of the Office of Management and Budget for U.S. President Ronald Reagan from January 1981 until August 1985. Committed to the doctrine of supply-side economics, he assisted the approval of the “Reagan Budget” (the Gramm-Latta Budget), which Stockman hoped to be a serious curtailment of the “welfare state”, gaining a reputation as a tough negotiator. The Atlantic Monthly magazine published the famous 18,246 word article, “The Education of David Stockman”, in its December 1981 issue, based on lengthy interviews Stockman gave to reporter William Greider. Stockman was quoted as referring to Reagan’s tax act as: “I mean, Kemp-Roth [Reagan’s 1981 tax cut] was always a Trojan horse to bring down the top rate…. It’s kind of hard to sell ‘trickle down.’ So the supply-side formula was the only way to get a tax policy that was really ‘trickle down.’ Supply-side is ‘trickle-down’ theory.” Of the budget process during his first year on the job, Mr. Stockman is quoted as saying: “None of us really understands what’s going on with all these numbers,” which was used as the subtitle of the article. On 1 August 1985, he resigned OMB and later wrote a memoir of his experience in the Reagan Administration titled The Triumph of Politics: Why the Reagan Revolution Failed, in which he specifically criticized the failure of congressional Republicans to endorse a reduction of government spending as necessary offsets to the large tax decreases, in order to avoid the creation of large deficits and an increasing national debt.

President Jimmy Carter’s last signed and executed fiscal year budget results ended with a $79.0 billion budget deficit, ending during the period of David Stockman’s and Ronald Reagan’s first year in office, on October 1, 1981.[4] The gross federal national debt had just increased to $1.0 trillion during October 1981 ($998 billion on 30 September 1981). By 30 September, 1985, four and a half years into the Reagan administration and shortly after Stockman’s resignation from the OMB during August 1985, the gross federal debt was $1.8 trillion. Stockman’s OMB work within the administration during 1981 until August was dedicated to negotiating with the Senate and House about the next fiscal year’s budget, executed later during the autumn of 1985, which resulted in the national debt becoming $2.1 trillion at fiscal year end 30 September 1986 and becoming $2.6 trillion at fiscal year end 30 September 1988.

Two very recent David Stockman quotes:

“(Extending the Bush tax cuts is) rank demagoguery. We should call it for what it is. If these people were all put into a room on penalty of death to come up with how much they could cut, they couldn’t come up with $50 billion, when the problem is $1.3 trillion. So, to stand before the public and rub raw this anti-tax sentiment, the Republican Party, as much as it pains me to say this, should be ashamed of themselves.”

Deficits: The Battle Over Taxing The Rich. CBS News. October 28, 2010.

“The Republican Party has totally abdicated its job in our democracy, which is to act as the guardian of fiscal discipline and responsibility. They’re on an anti-tax jihad — one that benefits the prosperous classes.”

How the GOP Became the Party of the Rich by Tim Dickinson. Rolling Stone. November 9, 2011

It took until the last years of the Clinton administration to get the spiraling deficit under control and convert it to a surplus. Then we again elected a Republican administration. Over the ensuing eight years the debt of the U.S. government was again doubled and the economy was left in a shambles.

Need I say more?

The above, in large part, consists of excerpts of work published by Wikipedia and is licensed under a Creative Commons Attribution-Noncommercial 3.0 United States License.

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