The Triumph of Politics Over Economics
David Stockman on TARP, the Fed, Ronald Reagan, and Ron Paul
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GoogleAt the very start of Ronald Reagan’s presidency, David Stockman debunked the myth that Reagan and the modern Republican Party were dedicated to small government.
In 1981, the 35-year-old Stockman gave up his Michigan seat in Congress to become the new president’s budget director. A vocal critic of what he continues to call the “welfare-warfare state,” Stockman had signed on because he believed in the limited-government principles that Reagan so vigorously espoused. Once inside the White House, however, Stockman became disenchanted. In his first year as budget guru, he gave an interview to journalist William Greider that became the basis for an explosive Atlantic article in which Stockman admitted that Reagan’s tax cuts for most Americans had been a ‘Trojan horse’ used to bring down the top rate. In his 1985 memoir, The Triumph of Politics, Stockman chronicled and criticized Reagan’s reluctance to fulfill his campaign promise of shrinking the size and scope of government and balancing the budget. During Reagan’s two terms, the budget was never balanced, net government spending was never cut, and the gross federal debt tripled.
Last fall Stockman was the GOP defector du jour once more, arguing against extending George W. Bush’s tax rates in The New York Times and on 60 Minutes, The Colbert Report, Parker-Spitzer, ABC, NPR, and MSNBC. Stockman’s argument —that it’s irresponsible to cut taxes when cumulative U.S. debt is steadily mounting as a percentage of GDP—is based on the principle that budgets can be balanced only when revenues meet expenditures. If we are not willing to actually shrink government spending, he says, then we should pay full freight now, rather than forcing our children and grandchildren to foot the bill.
Here is what didn’t come across in Stockman’s media blitz: Since writing The Triumph of Politics he has, in his words, “completed his homework” by reading such libertarian economists as Ludwig von Mises, F.A. Hayek, and Murray Rothbard. He thinks the Troubled Asset Relief Program (TARP) was a crony-capitalist boondoggle, that the bailouts of GM and Chrysler were unconscionable, and that stimulus spending is a hoax. He sees the abandonment of the gold standard in favor of floating exchange rates as the root cause of both the country’s fiscal problems and the 2008 financial crisis. He says Rep. Ron Paul (R-Texas) is the only politician today “who gets it,” and he’s hopeful that Paul’s growing influence may begin to shed light on “the scholastic arrogance” of the Federal Reserve. He is still against the welfare-warfare state, and he still thinks government should be cut down to size.
After leaving the White House, Stockman joined Salomon Brothers and the Blackstone Group before creating Heartland Industrial Partners, a private equity firm. In December, Nick Gillespie, editor in chief of reason.com and reason.tv, sat down with Stockman in his Greenwich, Connecticut house for a wide-ranging discussion of politics and economics, both past and present. A video version of this interview can be viewed and downloaded at reason.tv.
reason: You’ve emerged as a fierce proponent of letting all of the Bush-era tax rates expire and going back to the Clinton rates. Why do you want to revert to higher tax rates?
David Stockman: In pure philosophy, lower tax rates would be better. The problem is that we’ve had a 30-year referendum on spending—every aspect of the welfare state. We made a tiny bit of progress in ’81 that was restored over the course of the next couple of decades. Then we finally had Republican government in the Bush era, both in the Congress and in the White House, and nothing was cut. Everything was ratified. In fact, they added to Medicare through the drug benefit.
reason: Bush raised total federal outlays about 60 percent in 2010 dollars.
Stockman: That’s exactly right. So now we’re at the point where we have this large welfare state that seems immutable politically and this expanding warfare state that both parties seem to want to fund. In that environment, you’re kidding yourself if you think cutting taxes today is really cutting taxes. We’re simply deferring massive tax increases into the future, unfairly and immorally putting huge debt burdens on future generations, and that is just wrong.
(Article continues after the video.)
reason: There’s a presumption there that if we raise more federal revenue, it would actually go to fund existing programs, as opposed to just expanding into new areas.
Stockman: That’s always a risk, but I think there isn’t much pressure for structural expansion of the budget right now, and there hasn’t been for years—other than the one or two initiatives during the Bush period.
reason: Does there need to be, though? Medicare is set to continue to expand, particularly after 2020. So there doesn’t need to be a politician saying, “Let’s create whole new entitlements,” because we’ve got ones that are on autopilot to explode.
Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time.
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Stockman admitted that Reagan’s tax cuts for most Americans had been a ‘Trojan horse’ used to bring down the top rate.
Because bringing down the top rate had nothing to do with the largest peacetime economic expansion in history? Or because Stockman believes that only the rich got richer?
We can't cut spending? Yo' fuck Stockman.
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Why fuck Stockman, because he's right? We apparently can't cut spending based on the fact we haven't.
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Just because we haven't been able to cut spending yet doesn't mean it can't be done.
How is Stockman "right" when Nick has repeatedly shown how you don't need to increase taxes to balance the budget? True, from Stockman's employers point of view, unlimited "revenues" are most preferable.
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Just because we haven't been able to cut spending yet doesn't mean it can't be done.
Right; and just becuase we haven't created Utopia yet doesn't mean it can't be done. We just need the right people to lead us poor sheep to green pastures.
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Well that is good news...that means we won't die!
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the principle that budgets can be balanced only when revenues meet expenditures.
Bullshit. Budgets are balanced by cutting revenue and talking about cutting spending.
Also, cutting defense spending is less of a priority because the Pentagon isn't full of uppity poor people who need to learn their place.
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Needs more DURR and less HURR.
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Eh, I thought the DURR was about right. You have to be careful about overdoing it. The idea (I've been told) is to look like an idiot. Too much DURR and you give away the store.
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But the DURR is the real meat of the matter. The HURR is sort of the side-dish. The best scalloped potatoes ever can't salvage a terrible steak.
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Very true, but I'm sure you've heard the expression "small potatoes make the steak look bigger." That's an axiom of steroid users. And trolls.
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His name is Robert Paulson.
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Ah, the role Meat Loaf was born to play. You ever notice one of the rules of Fight Club was "no shirt, no shoes" yet Bob wore a shirt during his fight?
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His tits were big enough to be weapons. He wore a shirt in order to not have an unfair advantage.
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It might have been to protect himself. From two black eyes.
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If we are not willing to actually shrink government spending, he says, then we should pay full freight now, rather than forcing our children and grandchildren to foot the bill.
This is enough to show that Stockman is an economic-illiterate.
As has been demonstrated by Steven Landsburg (and no doubt many others), the only thing that matters (from the perspective Stockman brings) is how much you spend, not when you pay for it. You can do the math yourself, but it's pretty simple: you can cut taxes now and "pass the debt onto the grandchildren" or your can raise taxes now and "pay full freight" in the current generation, but each amounts to the same net wealth left for "the grandchildren." If you raise taxes now, you leave less capital and interest to the next generation (because it's confiscated now), and if you cut taxes now, you leave them more capital and interest with which to pay those later debts. It's a perfect wash.
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I thought you were quoting Steve Landesberg.
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Still pimping that get rich quick Keynesian scheme, I see. You know, the financing of government spending really does crowd out private investment, and it exacerbates even more pressure on actually meeting consumer demand during a down turn. Just sayin', Stockman is not the illiterate in anything here.
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Ah, but he is the illiterate. Taxes crowd out private investment to the same degree that government borrowing does. At the end of the day it's the spending, whether you finance it by taxes or debt.
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Not if you are paying interest on the debt and the share of the total that belongs to interest keeps increasing. Same as with a credit card. Except that I can't debase the currency and pay with cheaper dollars. I have to wait for the Fed to do that for me.
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Jeebus H. Christ but you guys are slow (and yes, I'm including sr7). Here's a hint for you: if you (Mr. Taxpayer) have $100 and you let it earn interest at 1% for a year, you'll have $101 after one year. That's the same rate of interest as the debt is accruing. So now, $100 of debt is also going to take $101 to pay back, after the same one year period. So, you can pay it now ($100), or later ($101), but in the latter case you, Mr. Taxpayer, has earned interest in the $100 you were allowed to keep (by not being taxed). Do I need to bring out the sock puppets?
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he's mentioned debasing the currency. So if inflation is approx. 3%, but you owe 1% in interest, then you will see a reduction in your debt. Sure, the amount will go up, but the value of it is lowered. So, you actually have lower debt. It works only if the interest is lower than the rate of inflation. Works great for those taking on debt, but it hurts those who save.
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So it doesn't matter how much the bank pays in interest on deposits or charges on loans as long as they only lend the same amount of principle?
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You can buy treasuries. You can loan (to the government) at the same interest rate the government borrows (from you). I thought this was obvious.
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If that taxpayer dies in July, than who meets his debt obligation come next January? The debt burden is still there, but he is dead. His kid then? His kid didn't vote for the maroons voting for this government like his retarded pop did, why does he have to fork it over when he was going to put that buck in his college savings fund. I guess it is alright that no one pays it, eh? Except, that is not how it works. It is an expenditure, and it is coming out of someone's behind, as I pointed out below:
After that it was off the races. When the debt super-cycle apogee came in 2007, it took $4 trillion of debt growth to produce a gain of just $700 billion of GDP. At the point, the debt-to-income growth ratio had climbed to 6.0X, and shortly thereafter the man from Citigroup finally stopped dancing.
You can't just keep kicking it down the road without there being consequences. How can you call yourself an economist and think like that, swifty?
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His kid didn't vote for the maroons voting for this government like his retarded pop did,
His kid didn't vote for the maroons comprising this government like his retarded pop did . . .
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Your first statement made sense. Electors = maroons.
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That interest is just the way tracking time preference. In any event, you loose the PV of those potential investment dollars today. That's the actual cost of govt spending.
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Since you seem to think public debt is Thanksgiving gravy, here is a real economist, David Stockman, to explain the problem to you:
But notwithstanding choice of stimulants, Republicans too believe that the U.S. economy is in a conventional business cycle, and that the rebound remains much too fragile to tolerate any jarring fiscal actions. Thus, the renascent Keynesian consensus will result in kicking the fiscal can down the road again and again.
It is here that the true nightmare scenario arises – owing to the possibility that this mainstream outlook is completely erroneous, and that the nation’s deep economic ills are rooted in the massive excess debt burden accumulated on the U.S. balance sheet after 1971. In that event, we would be in the midst of an Austrian debt deflation, not a Keynesian cyclical rebound.
From a fiscal perspective, a prolonged debt deflation would be the coup de grâce. That’s because debt deflations crush nominal GDP growth, owing to the evaporation of credit-fueled additions to spending. In turn, low nominal GDP growth is bad news for revenues because what we tax, obviously, is money incomes.
Moreover, the actual GDP data suggests that debt deflation is already resident in the numbers. Total U.S. credit market debt essentially stopped growing in late 2007 at a level slightly above $50 trillion compared to a $14.3 trillion level of GDP. During the three years since, total debt growth has been at a tepid 1.5% annual rate – with public debt growing much faster than this and financial and household sector liabilities actually shrinking.
Not surprisingly, nominal or money GDP has gained only $530 billion during those 36 months, meaning that the annualized growth rate has been only 1.2 percent. There is no three-year streak that anemic anywhere in the data since the 1930s. Moreover, even if you allow for the alleged rebound since Q2 2009, the rate of money GDP growth has only been 3.8%, and was actually just 3.2% in the most recent quarter.
By contrast, the new White House budget projects money GDP growth of 5.6% per annum over the next five years – meaning that nominal GDP would reach $20 trillion by then. At a 3.5% growth rate, however, which is triple the growth rate of the last three years and in-line with the post-June 2009 rate of advance – money GDP would come in at only $18 trillion by 2016.
This $2 trillion variance might be written off to wild-blue speculation. Then again, at the current marginal Federal tax yield, the implied revenue shortfall is another $400 billion annually. Stated differently, the current policy deficit may actually be in the $2 trillion annual range after factoring in realistic incomes and revenues.
The infernal engine of the dollar may thus have been doubly diabolical on the fiscal front. First, it hooked the American political system on the "deficits don’t matter" theorem by eliminating the economically painful squeezes and drains on the monetary system that traditionally accompanied fiscal deficits.
Secondly, to the extent that it fueled the debt super-cycle that swelled from 1980 until 2008, it generated a false prosperity and bubble-derived fiscal windfalls that have now evaporated.
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False prosperity, waahh?!? You ask in disbelief. Yes, indeed, to continue:
Wall Street bulls and Keynesian economists – to indulge in a redundancy – insist that this extra $30 trillion of debt is no sweat. Presumably, they would otherwise not be forecasting 10 years of standard growth rates with no recession, and would not be capitalizing corporate earnings at the conventional 15X EPS.
Put another way, by the lights of mainstream opinion, our recent parabolic departure from the golden constant of leverage apparently represents nothing more than a late blooming enlightenment – the shedding of ancient superstitions about the perils of too much debt in households, businesses and governments alike.
If this were true, it would be a pity. Had our benighted financial forebears only known better, they would have levered up the USA long ago – producing unimagined surges of growth and wealth.
Indeed, economic miracles like the Internet might have been generated at a far earlier time – say in 1950, not 1990; and it might have been invented by Senator Albert Gore Sr. of Tennessee rather than his son Albert Gore Jr. of Hollywood.
The alternative possibility, however, is that our forebears actually knew a thing or two about finance. Perhaps they understood that in not settling our accounts with the world – we were merely borrowing GDP, not growing it.
The numbers, in fact, suggest exactly that. During the era of the golden constant, about $1.50 of debt growth accompanied each dollar of GDP growth. By 1989, each dollar of GDP growth took $2.50 of debt increase, and by 1999 the ratio rose to $3.30.
After that it was off the races. When the debt super-cycle apogee came in 2007, it took $4 trillion of debt growth to produce a gain of just $700 billion of GDP. At the point, the debt-to-income growth ratio had climbed to 6.0X, and shortly thereafter the man from Citigroup finally stopped dancing.
That last is the important point that cannot be ignored. Public debt accompanied by the unreality backing monetary policy crowds out private growth.
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If that's the case then why run deficits? I thought the deficit was supposed to boost GDP at some future point. You're telling me all we can ever do is break even.
I think you're assuming a perfectly efficient market. If its not, then goverment can only help if they can beat the market. Is that what you want? Government as day trader?
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What he's saying is not that deficits don't matter, but that when you create a deficit for gdp growth you're only borrowing your gdp growth; and when you borrow at a 6:1 ratio you're really getting f'd in the a
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More DURR and and less HURR
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Yeah, his reasoning is backwards. What is the value of paying the tab now if they just keep building it up higher for our grandchildren to deal with? Its entirely meaningless if we don't seriously revise our economic policies. For the sake of future generations a change in policy has to come first.
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Not at all correct Draco.
Life and Government are the same you can't spend more out of the Left pocket than you have coming INTO the right pocket. No matter what dream land money you "think" you have coming in" tomorrow".Basically if you tie spending to income and cap it there unless your at war and have permission from the people to be at war, it will force politicians to have to make decisions that are good for growth of the economy and wealth at the same time, not crony Capitalism crap that has happened for the last several years. (bail outs, buy outs, and "reform")
Face it this country must be run like a business. If not it will fail!
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Someone has dared to question St. Reagan. This injustice cannot stand.
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Well, I know I got all excited, then I realized the guy questioning St. Reagan wants smaller government, so it's a pyrrhic victory.
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If we are not willing to actually shrink government spending, he says, then we should pay full freight now, rather than forcing our children and grandchildren to foot the bill.
So, Stockman would support not cutting a frickin' nickel, as long as we raised taxes enough to cover the outlay?
For 2010, our annual fedgov outlays are roughly $3.7T, and receipts are roughly $2.2T. To increase receipts to $3.7T, we would need to increase taxes by 68%. And keep raising them every year as spending goes up.
Does he seriously believe that raising federal taxes by 68% wouldn't vaporize the economy?
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I read the interview in the print edition, and my take-away was not that he's seriously saying raise taxes, but rather to stop lying to people, by charging them 60 cents for a dollars worth of government.
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That is my take also.
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I didn't read it that way. He said in several parts of the interview that he does support cutting spending, and he specifically called out defense spending, social security, agricultural subsidies, etc. I read that comment to mean that, if we are not going to cut spending, we should raise taxes to at least pay for it. And if it weren't for the fact that tax hikes have not been shown to increase revenue, I would agree with him.
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And if it weren't for the fact that tax hikes have not been shown to increase revenue, I would agree with him.
That's where it really gets tricky. In the particular instance Stockman addressed, the charts I've seen show that the Bush tax cut did result in a loss of revenue, especially the middle class portion of the cut that all parties wanted to keep. On the other hand, higher business taxes do tend to be self defeating in the long run.
Of course, I don't advocate raising taxes. I advocate getting rid of most government functions, as it will have to be done anyway.
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I would agree with him.
I second that. People need to feel the consequences of the 'freebies' they *think* they are getting.
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Would you look at the crease on Reagan's pants? How can anyone say that isn't pure Presidential awesomeness?
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Where is this "crease" meme coming from?
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David Brooks had a perfectly silly article around the 2008 election in which he equated Obama's perfectly creased pants with the ability to be an effective President.
He might have been trying to argue that it represented Obama's attention to detail (a conceit long since disproven, obviously), but regardless, he came off sounding like a star-struck fanboi who was as dazzled by Obama's media-created image as Peggy Joseph.
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Reading through the whole long article, it is clear that Stockman is advocating pay-as-you-go as a means of psychological pressure on the public to make more rational decision when voting because the "pain" of those decisions are felt now, not by hypothetical grand-children.
I completely agree with this idea. It is not too far from proposals to move Tax Day nearer to Election Day or to eliminate withholding to turn a slow drip of money into a huge bloody mess of a check you have to write.
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We too believe other people should pay as we go.
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How about you just go.... like off a cliff!
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David Stockman: The problem is that we’ve had a 30-year referendum on spending—every aspect of the welfare state.
That's news to me. I don't remember ever voting on a referendum on cutting spending. He's just a member of that segment of the political class who claims to want limited government while blaming voters for not being willing to accept cuts in government spending and intrusion as if the Red and Blue ever give voters a real choice. Stockman loves Big Government. Insincere prick.
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your flawed assumption is that "we" = "you". You know at some point people really liked the idea of, say NCLB, PPACA, MMA, OIF, OEF. The public at large was complicit with these excesses. I think TARP was really the only thing that met with large scale protesting.
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Bullshit. The really big political waves during my lifetime were Reagan's Presidential elections, 1994 and 2010. In all cases the message from voters was "Government is too big and intrusive" and in all cases (including 2010 it looks like), the political class sabotaged any real effort to limit the expansion of government. Every government program has its supported leeches. Any effort to end a government program experiences resistance. That resistance is always treated by most of the national media as broad, deep, insurmountable and politically dangerous to ignore. Polls are generated, sob stories are invented and publicized, the usual-suspect pundits issue dire warnings about negative political consequences that will leave the proponents of reform in the political wilderness for decades. Virtually all of this resistance is manufactured astroturfical nonsense, but it is used by statists to constantly insist that the American public really does love big government and true reform is politically impossible.
Also, it is rare that, when a program is first proposed, politicians stand up and forcefully oppose what is being advanced, effectively explaining why the new program is ideologically a bad idea. The pro voices are usually loudest and the program gets pushed through without any real public input.
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The problem, it seems, is that the public doesn't have the guts to stick with that message for more than one election cycle. Perhaps 2012 will be different...
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By voting for us, it's the polar opposite of a referendum on cutting spending.
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This was my take away as well. I don't think he is advocating a 90% top marginal as much as "raise taxes to pay for it then see how fast the cuts come" approach.
I could be wrong...but that rarely happens, unless you talk to my wife.
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I think you're right, and I largely agree with stockman. I tend to advocate a flat tax, which will raise taxes for the rich and the poor (but not the middle class so much).
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I tend to advocate a flat tax, which will raise taxes for the rich and the poor (but not the middle class so much).
And cut the deductions. Keep it simple. One or two brackets with a few basic deductions. The problem is that after a while the deductions and multiple brackets will just creep back in.
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This article piqued my interest because I caught "Reagan/GOP/Defector/disenchanted".
Then I read this and realized that I can't abide this man or his ideas:
He is still against the welfare-warfare state, and he still thinks government should be cut down to size.
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When Stockman talks about raising taxes he is simply representing his employer.
Blackstone is the world’s largest independent alternative asset manager, serving the investment needs of leading public pension funds, academic and charitable institutions and other investors for more than 20 years.
This small quote from Blackstone's web site would have placed this article in its proper perspective. A rent seeker looking for the government to collect more rent.
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Even if he's just talking his book, I can see his point--that if you want goodies, housed in a huge welfare/warfare/bureaucratic complex, you have to be prepared to pay for it. It's immoral to pass on a trainload of debt to future generations just because the current ones didn't want to feel the pain.
The most idiotic belief of the left is that "the rich" have enough money to pay for goodies for everyone in perpetuity, since they have enough to pay for themselves. For all their posturing about being "forward-thinking," most progressives are really medievalists at heart.
They refuse to take the last 90+ years into account, thinking, "Well, if other countries can take in over 20% of GDP in taxes, we can too!", disregarding the fact that it took an unsustainable economic bubble, resulting in a sub-4% U3 driven by revolutionary technology and increasingly widespread access, to even get to that threshold since the passage of the 16th Amendment. They don't account for human behaviors, nor current geopolitical or economic realities, as if America's growth in the 1950s happened in a self-sustaining vacuum.The point is that there won't be an honest conversation on the ability of our government and our economy to maintain itself until EVERYONE, from the poor all the way up to Bill Gates, is forced to foot the bill to sustain it. When people can't afford to put food on the table because 70% or more of their paycheck is going to keep the deadbeat class in government cheese, it won't matter at that point how hard professional activists and the media push the idea that cutting government spending will "hurt" the disadvantaged, because the disadvantaged will be paying for that, too.
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So, you can pay it now ($100), or later ($101), but in the latter case you, Mr. Taxpayer, has earned interest in the $100 you were allowed to keep (by not being taxed). Do I need to bring out the sock puppets?
Wait, what?
I'm not sure how Punch and Judy can help you.
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I feel silly even mentioning this, but
NOT ALL SPENDING IS EQUAL.
Fucking hell.
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True. When I spend money I earned, I get something I value at least as much as what I spent. When the govt does it for me, I get nothing and society gets less than full value. Tax dollars are not spent that carefully.
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But...but...Reagan Revolution! He got the government off our backs! And defeated the Soviet menace!
REAGAN SMASH!!!!
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Always cut spending, never raise taxes.
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Stockman is allowing himself to be used as a poster boy of the leftist by calling for repealing the Bush tax cuts.
I don't know how many times I've heard some leftists throw that up.
If Stockman wants to get real on taxes, why doesn't he call for increasing taxes on the approximately 50% of the population who aren't paying any taxes at all?
Those folks are certainly sucking up government services and subisidies.
Cut the subsidies out and make them start paying up for government the same as the people who already pay taxes.
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Because what this country needs is even more regressivity.
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I suggest whenever Stockman is thrown in your face for being in favor of repealing the Bush tax cuts you suggest they read the rest of his statement. Saying "I hate fire" means something very different than "I hate fire in my kitchen."
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You gotta love Stockman. Decries the Fed's easy money, after working years on Wall Street -- the big beneficiaries of the Fed. BTW, I don't think Ron Paul would raise taxes. Dr. Paul understands the problem is spending.
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I would recommend looking up the Henry Hazlitt Memorial speech from which I quoted extensively above. The debt burden is indeed dampening the private economy to a greater extent than even the tax burden. I don't think it has really sunk in for most of us. That really is how bad the crowding out effect is now. I don't recommend increased taxation, and I understand those who are angry at Stockman for letting the left media mischaracterize the substance of his critique in order to justify government 'largess'. However, the fact the Federal Government generated more debt in the first two months of this year than it did in all of 2007 is a much more damaging concern than a return to Clinton era taxation if you weigh those two factors.
It is not binary, of course, and that is where Stockman's critics have a valid point. Cut taxes, cut spending considerably more than you cut the taxes, eliminate regulation and fire most of those who work in Washington and this nation might actually have a chance. If you only raise taxes but not eliminate the problem of spending, well there is not a chance in hell I'm keeping my eggs in the American basket even if the majority can somehow live with the consequences of doing nothing (essentially raising taxes would be because it encourages more spending).
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"a return to Clinton era taxation if you weigh those two factors."
A good retort to throw in the face of liberals who spout returning to Clinton era tax rates would be to say only if we can return to Clinton era spending levels to go with it.
If the principle is good enough for one side of the equation, it's good enough for the other side as well.
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As a bonus, in the section I didn't quote from, he shreds TARP to pieces.
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David is right about the counter productive nature of printing. The free market uses price signals to determine what is to be made. If prices are distorted by printing, the free market does not work properly.
If printing confiscates the majority's IRAs and pensions, the majority is dependent upon Social Security. If printing lowers productivity, there are simply not enough resources left to fund Social Security at a reasonable level. The printing press is creating a dismal future for the country, all to generate a small amount of useless activity today.
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Stockman comes across as a "true believer", disappointed in his Messiah. Unfortunately, what he believes isn't necessarily true. He loses credibility when he talks his book. Gold standard, simple and wrong headed. Look at the series of economic calamities in the late 1800s and early 1900s.
In my opinion, although I agree with most of Reagan's policies, his primary failing in the economic realm was believing "people" act rationally as a group. When I have less money coming in (less revenue in terms of the govt), I spend less. That happened to an extent under Reagan, as the belief in Big Government was quetioned, but evidentially not so much any more.
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What would you like me to look at about the economic calamities of the 1800's and early 1900's? What about that one economic calamity of the 1930's?
Please consider that you have no objective way to compare economic calamities between post-1913 and pre-1913. It's merely an accounting trick brought about by Mr. Wilson.
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dfshdsfg
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I agree with much of what Stockman says. What he fails to note is the effect of low earned income tax rates on economic growth. How does he explain the great prosperity which lasted from 1982 right through the 90's and helped everyone including Bill Clinton? His retrospective on both Korea and Vietnam are also lacking any humanitarian or economic contexts. I see a guy who says a lot of interesting stuff but whose own rigidity and blind spots keeps him from any mainstream movement which could restore real job creation and real economic growth.
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nice spot.
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