From: dwells@fits.cv.nrao.edu (Don Wells)
Subject: Re: DEBT PER CAPITA (was Hillary Clinton....President ?)
Organization: nrao
	<2B029523.207@deneva.sdd.trw.com>
Date: Sun, 15 Nov 1992 23:15:57 GMT

In article <2B029523.207@deneva.sdd.trw.com> helding@pooh.sdd.trw.com
(Steve Helding) writes:
   pcorless@cisco.com (Peter Corless) writes:
   >Note that under the Bush administration.. the deficit skyrocketed..
   >.. to $4 Trillion.. So much for Bush calling Clinton
   >a "tax & spend" Democrat!
 SH> ... I've often wondered how much the increase in spending can
 SH> attributed to the executive branch as opposed to Congress... I
 SH> believe a good deal of the national debt can be attributed to the
 SH> tremendous tax cuts instituted during the Reagan administration
 SH> along with the hugh defense outlays.  .. doesn't Congress share
 SH> in this responsibility?  

I am currently reading David Stockman's book "The Triumph of Politics"
(circa 1987).  Stockman describes his ideological background, and then
explains how he and his conservative friends in Congress (e.g. Phil
Gramm and Jack Kemp) devised the "supply-side" strategy, and how they
sold the idea to Ronald Reagan at the start of the 1980 primary
campaign. After Reagan won the 1980 election, he appointed Stockman to
be his Budget Director. Stockman describes how he turned the economic
concept into real policy for Reagan. He discusses the cash flow of the
federal government, and he makes it clear that he understood that
reducing taxes sharply while raising military expenditures sharply
could only make budgetary sense if the government simultaneously
reduced non-military expeditures. Stockman makes it clear in the book
that he did not believe that the Reagan tax cut would stimulate the
economy enough that tax revenues would rise and balance the budget;
Reagan may have believed in this idea, but his Budget Director didn't
(this was the idea which George Bush had referred to as "voodoo
economics" during the 1980 Republican primary campaign).

Stockman describes the process by which he made up a list of
across-the-board proposed budget cuts during the first few weeks of
1980, with a deadline of mid-February 1980, when Reagan made a speech
to Congress.  He describes, in great detail, how he was systematically
defeated by the whole political system. Some of the most painful
defeats came from "conservative" Cabinet secretaries who had just been
appointed by Reagan, and who presumably shared his philosophy. Their
departments made up endless, elaborate justifications for continuation
of a myriad of programs which Stockman considered to be superfluous,
if not immoral (Stockman was almost a libertarian in philosophy).
Most of these Secretaries accepted what their staffs said, and
proceeded to defend their turf! In general, Reagan sided with the
Secretaries rather than Stockman. Stockman makes numerous unflattering
remarks about Reagan..

Stockman describes how attempts to cut out "pork" were defeated by
powerful members of Congress, many of whom were Republicans who would
piously campaign against "pork". In fact, I have been surprised by the
fact that Stockman does not cite a "Democratic Congress" as the the
problem. The reason is, of course, that the Republicans were in the
*majority* in the Senate in that period and, in addition, many
Southern Democrats would vote with them.

The supply-side tax cut was tremendously popular and so were the
military expenditures, which acted like a big public works program for
many areas of the country, and so both were enacted into law. The
spending cuts -- which Stockman knew were essential in order to
balance the budget -- were not popular, and were defeated by the
political system.  Stockman *predicted* the enormous deficits which
would result from this "Triumph of Politics", *structural* deficits
which we still have today. His book is a "mea culpa", an admission of
naivete about the political process and a confesssion of guilt for
policies which he must have regarded as both stupid and immoral, and
for which he was prime architect.

I am reading Stockman's book because the analogies between the
situation 12 years ago and today are quite clear, and I hope to gain
insight into the prospects and means for moving toward balancing the
budget during Clinton's first term.

	-*-

Bush continued Reagan's popular economic policies during 1989-92, of
course.  The Keynesian fiscal stimulus which the Republican political
"triumph" applied to the economy helped to produce a boom through most
of the 80s, and this was very popular and was lauded, right up to the
start of the 1992 campaign season. The country owes a debt of
gratitude to Paul Tsongas and Ross Perot for pointing out the bad
consequences and the shameful *immorality* of these 12 years of
deficit spending, deficit spending which was backed by both Republican
and Democratic politicians, as well as by the Republican executive
branches of three successive administrations.

--

Donald C. Wells             Associate Scientist        dwells@nrao.edu
National Radio Astronomy Observatory                   +1-804-296-0277
520 Edgemont Road                                 Fax= +1-804-296-0278
Charlottesville, Virginia 22903-2475 USA            78:31.1W, 38:02.2N 
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