GOP Wrecked the Budget - Reagan's OMB Director

Modbert

Daydream Believer
Sep 2, 2008
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http://www.nytimes.com/2010/08/01/opinion/01stockman.html?_r=1

IF there were such a thing as Chapter 11 for politicians, the Republican push to extend the unaffordable Bush tax cuts would amount to a bankruptcy filing. The nation’s public debt — if honestly reckoned to include municipal bonds and the $7 trillion of new deficits baked into the cake through 2015 — will soon reach $18 trillion. That’s a Greece-scale 120 percent of gross domestic product, and fairly screams out for austerity and sacrifice. It is therefore unseemly for the Senate minority leader, Mitch McConnell, to insist that the nation’s wealthiest taxpayers be spared even a three-percentage-point rate increase.

Republicans used to believe that prosperity depended upon the regular balancing of accounts — in government, in international trade, on the ledgers of central banks and in the financial affairs of private households and businesses, too. But the new catechism, as practiced by Republican policymakers for decades now, has amounted to little more than money printing and deficit finance — vulgar Keynesianism robed in the ideological vestments of the prosperous classes.

It is also an outcome that Milton Friedman said could never happen when, in 1971, he persuaded President Nixon to unleash on the world paper dollars no longer redeemable in gold or other fixed monetary reserves. Just let the free market set currency exchange rates, he said, and trade deficits will self-correct.

It may be true that governments, because they intervene in foreign exchange markets, have never completely allowed their currencies to float freely. But that does not absolve Friedman’s $8 trillion error. Once relieved of the discipline of defending a fixed value for their currencies, politicians the world over were free to cheapen their money and disregard their neighbors.

In 1981, traditional Republicans supported tax cuts, matched by spending cuts, to offset the way inflation was pushing many taxpayers into higher brackets and to spur investment. The Reagan administration’s hastily prepared fiscal blueprint, however, was no match for the primordial forces — the welfare state and the warfare state — that drive the federal spending machine.

Soon, the neocons were pushing the military budget skyward. And the Republicans on Capitol Hill who were supposed to cut spending exempted from the knife most of the domestic budget — entitlements, farm subsidies, education, water projects. But in the end it was a new cadre of ideological tax-cutters who killed the Republicans’ fiscal religion.

Through the 1984 election, the old guard earnestly tried to control the deficit, rolling back about 40 percent of the original Reagan tax cuts. But when, in the following years, the Federal Reserve chairman, Paul Volcker, finally crushed inflation, enabling a solid economic rebound, the new tax-cutters not only claimed victory for their supply-side strategy but hooked Republicans for good on the delusion that the economy will outgrow the deficit if plied with enough tax cuts.

It is not surprising, then, that during the last bubble (from 2002 to 2006) the top 1 percent of Americans — paid mainly from the Wall Street casino — received two-thirds of the gain in national income, while the bottom 90 percent — mainly dependent on Main Street’s shrinking economy — got only 12 percent. This growing wealth gap is not the market’s fault. It’s the decaying fruit of bad economic policy.

Under these circumstances, it’s a pity that the modern Republican Party offers the American people an irrelevant platform of recycled Keynesianism when the old approach — balanced budgets, sound money and financial discipline — is needed more than ever.

This is a interesting article to say the least. Thoughts USMB? Toro?
 
David Stockman ran the Office of Management and Budget for Ronald Reagan.

IF there were such a thing as Chapter 11 for politicians, the Republican push to extend the unaffordable Bush tax cuts would amount to a bankruptcy filing. ... It is therefore unseemly for the Senate minority leader, Mitch McConnell, to insist that the nation’s wealthiest taxpayers be spared even a three-percentage-point rate increase.

More fundamentally, Mr. McConnell’s stand puts the lie to the Republican pretense that its new monetarist and supply-side doctrines are rooted in its traditional financial philosophy. Republicans used to believe that prosperity depended upon the regular balancing of accounts — in government, in international trade, on the ledgers of central banks and in the financial affairs of private households and businesses, too. But the new catechism, as practiced by Republican policymakers for decades now, has amounted to little more than money printing and deficit finance — vulgar Keynesianism robed in the ideological vestments of the prosperous classes.

This approach has not simply made a mockery of traditional party ideals. It has also led to the serial financial bubbles and Wall Street depredations that have crippled our economy. ...

The second unhappy change in the American economy has been the extraordinary growth of our public debt. In 1970 it was just 40 percent of gross domestic product, or about $425 billion. When it reaches $18 trillion, it will be 40 times greater than in 1970. This debt explosion has resulted not from big spending by the Democrats, but instead the Republican Party’s embrace, about three decades ago, of the insidious doctrine that deficits don’t matter if they result from tax cuts.

In 1981, traditional Republicans supported tax cuts, matched by spending cuts, to offset the way inflation was pushing many taxpayers into higher brackets and to spur investment. The Reagan administration’s hastily prepared fiscal blueprint, however, was no match for the primordial forces — the welfare state and the warfare state — that drive the federal spending machine.

Soon, the neocons were pushing the military budget skyward. And the Republicans on Capitol Hill who were supposed to cut spending exempted from the knife most of the domestic budget — entitlements, farm subsidies, education, water projects. But in the end it was a new cadre of ideological tax-cutters who killed the Republicans’ fiscal religion.

Through the 1984 election, the old guard earnestly tried to control the deficit, rolling back about 40 percent of the original Reagan tax cuts. But when, in the following years, the Federal Reserve chairman, Paul Volcker, finally crushed inflation, enabling a solid economic rebound, the new tax-cutters not only claimed victory for their supply-side strategy but hooked Republicans for good on the delusion that the economy will outgrow the deficit if plied with enough tax cuts.

By fiscal year 2009, the tax-cutters had reduced federal revenues to 15 percent of gross domestic product, lower than they had been since the 1940s. Then, after rarely vetoing a budget bill and engaging in two unfinanced foreign military adventures, George W. Bush surrendered on domestic spending cuts, too — signing into law $420 billion in non-defense appropriations, a 65 percent gain from the $260 billion he had inherited eight years earlier. Republicans thus joined the Democrats in a shameless embrace of a free-lunch fiscal policy. ...

The day of national reckoning has arrived. We will not have a conventional business recovery now, but rather a long hangover of debt liquidation and downsizing — as suggested by last week’s news that the national economy grew at an anemic annual rate of 2.4 percent in the second quarter. Under these circumstances, it’s a pity that the modern Republican Party offers the American people an irrelevant platform of recycled Keynesianism when the old approach — balanced budgets, sound money and financial discipline — is needed more than ever.

http://www.nytimes.com/2010/08/01/opinion/01stockman.html
 
"The Reagan administration’s hastily prepared fiscal blueprint, however, was no match for the primordial forces — the welfare state and the warfare state — that drive the federal spending machine."

How was this the GOP fault again? Does Stockman read this before he published it?
 
Threads merged Toro but I decided to go with your title instead.
 
And Reagan still never controlled Congress. Does anyone wonder why Stockman did not last long?

For Reagan, it must have been like discovering he'd hired Jake Starkey to be his Budget Director.
 
"The Reagan administration’s hastily prepared fiscal blueprint, however, was no match for the primordial forces — the welfare state and the warfare state — that drive the federal spending machine."

How was this the GOP fault again? Does Stockman read this before he published it?

Read Stockman's book. He will tell you that it was the Republicans who believed this fairy tale that you can cut taxes and the growth will create enough revenue to pay for government spending, and it was the Supply-Siders who argued for it in budget negotiations, not just Democrats.

The Republican Party used to believe in fiscal discipline. Its long past that. Now it believes in All Tax Cuts All the Time, no matter what the fiscal consequences.

When I see the Tea Party people with signs that say "Cut MY Social Security" then I'll know the party is serious. Otherwise, it is merely continuing to perpetuate an intellectual fraud that it has for the past 30 years.
 
And Reagan still never controlled Congress. Does anyone wonder why Stockman did not last long?

For Reagan, it must have been like discovering he'd hired Jake Starkey to be his Budget Director.

Uh, Stockman was there from 1981 to 1985. In fact, he left of his own free will.

David Stockman - Wikipedia, the free encyclopedia

After Stockman's first year at OMB and on the heels of 'being taken to the woodshed by the president' over his candor with Atlantic's William Greider, Stockman became disillusioned with the projected trend of increasingly large federal deficits and the rapidly expanding national debt, which he blamed on the Reagan tax cut. On 1 August 1985, he left 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 support a reduction in government spending as necessary offsets to the large tax cuts, in order to avoid the creation of large deficits and an exploding national debt.
[edit]

And you're right, Reagan never controlled Congress if you don't count the Senate from 1981 to 1987.

97th United States Congress - Wikipedia, the free encyclopedia

98th United States Congress - Wikipedia, the free encyclopedia

99th United States Congress - Wikipedia, the free encyclopedia

There goes Frank trying to rewrite history.
 
"The Reagan administration’s hastily prepared fiscal blueprint, however, was no match for the primordial forces — the welfare state and the warfare state — that drive the federal spending machine."

How was this the GOP fault again? Does Stockman read this before he published it?

Read Stockman's book. He will tell you that it was the Republicans who believed this fairy tale that you can cut taxes and the growth will create enough revenue to pay for government spending, and it was the Supply-Siders who argued for it in budget negotiations, not just Democrats.

The Republican Party used to believe in fiscal discipline. Its long past that. Now it believes in All Tax Cuts All the Time, no matter what the fiscal consequences.

When I see the Tea Party people with signs that say "Cut MY Social Security" then I'll know the party is serious. Otherwise, it is merely continuing to perpetuate an intellectual fraud that it has for the past 30 years.

Democrats controlled Congress all those years!!!!!!!!!!!!!!!!

How were Republicans supposed to control spending, by mental telepathy?

Reagan mentioned Entitlement reform and the LMSM went Batshit crazy on him
 
The Republican Party is just Keynesianism in drag.

At least the Democrats say that they'll increase government spending AND increase your taxes. You can respect that. The Republicans say they'll cut your taxes but won't cut your spending. It's hard to respect that.
 
Democrats controlled Congress all those years!!!!!!!!!!!!!!!!

How were Republicans supposed to control spending, by mental telepathy?

Reagan mentioned Entitlement reform and the LMSM went Batshit crazy on him

And what about from 1994 to 2006? Do those years just not count? Again, Republicans controlled the Senate from 1981 to 1987 too. Reagan could of also vetoed any bill he didn't like.
 
And Reagan still never controlled Congress. Does anyone wonder why Stockman did not last long?

For Reagan, it must have been like discovering he'd hired Jake Starkey to be his Budget Director.

Uh, Stockman was there from 1981 to 1985. In fact, he left of his own free will.

David Stockman - Wikipedia, the free encyclopedia

After Stockman's first year at OMB and on the heels of 'being taken to the woodshed by the president' over his candor with Atlantic's William Greider, Stockman became disillusioned with the projected trend of increasingly large federal deficits and the rapidly expanding national debt, which he blamed on the Reagan tax cut. On 1 August 1985, he left 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 support a reduction in government spending as necessary offsets to the large tax cuts, in order to avoid the creation of large deficits and an exploding national debt.
[edit]

And you're right, Reagan never controlled Congress if you don't count the Senate from 1981 to 1987.

97th United States Congress - Wikipedia, the free encyclopedia

98th United States Congress - Wikipedia, the free encyclopedia

99th United States Congress - Wikipedia, the free encyclopedia

There goes Frank trying to rewrite history.

I thought Stockman left sooner. My bad.

Having a majority in the Senate is the new controlling Congress? Is that why Reagan was able to close the Department of Education?
 
I thought Stockman left sooner. My bad.

Having a majority in the Senate is the new controlling Congress? Is that why Reagan was able to close the Department of Education?

I never said it wasn't controlling all of Congress. However, you're acting as if the Republicans had no say. Last I checked, they had the senate and the veto pen of Reagan. Stop acting like the Republicans were defenseless in doing anything. Plus, Reagan expanded Government while in office.
 
"The Reagan administration’s hastily prepared fiscal blueprint, however, was no match for the primordial forces — the welfare state and the warfare state — that drive the federal spending machine."

How was this the GOP fault again? Does Stockman read this before he published it?

Read Stockman's book. He will tell you that it was the Republicans who believed this fairy tale that you can cut taxes and the growth will create enough revenue to pay for government spending, and it was the Supply-Siders who argued for it in budget negotiations, not just Democrats.

The Republican Party used to believe in fiscal discipline. Its long past that. Now it believes in All Tax Cuts All the Time, no matter what the fiscal consequences.

When I see the Tea Party people with signs that say "Cut MY Social Security" then I'll know the party is serious. Otherwise, it is merely continuing to perpetuate an intellectual fraud that it has for the past 30 years.

Democrats controlled Congress all those years!!!!!!!!!!!!!!!!

How were Republicans supposed to control spending, by mental telepathy?

Reagan mentioned Entitlement reform and the LMSM went Batshit crazy on him

Ah yes, they held a gun to Reagan's head the entire time. He didn't have the power to veto it or anything.
 
"The Reagan administration’s hastily prepared fiscal blueprint, however, was no match for the primordial forces — the welfare state and the warfare state — that drive the federal spending machine."

How was this the GOP fault again? Does Stockman read this before he published it?

Read Stockman's book. He will tell you that it was the Republicans who believed this fairy tale that you can cut taxes and the growth will create enough revenue to pay for government spending, and it was the Supply-Siders who argued for it in budget negotiations, not just Democrats.

The Republican Party used to believe in fiscal discipline. Its long past that. Now it believes in All Tax Cuts All the Time, no matter what the fiscal consequences.

When I see the Tea Party people with signs that say "Cut MY Social Security" then I'll know the party is serious. Otherwise, it is merely continuing to perpetuate an intellectual fraud that it has for the past 30 years.

Democrats controlled Congress all those years!!!!!!!!!!!!!!!!

How were Republicans supposed to control spending, by mental telepathy?

Reagan mentioned Entitlement reform and the LMSM went Batshit crazy on him

Oh, bullshit.

Republicans were arguing that that Reagan didn't have to cut spending. They were called "Supply-Siders." But it's convenient for Republicans who have deified Reagan to conveniently forget this and re-write history because they have contributed enormously to the budget deficits that they now claim to be so concerned about. The fiscally responsible Republicans were were pushed aside by the All Tax Cuts All the Time wing that has come to dominate the party.

THAT is why Stockman left, not because of Democrats.
 
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Democrats controlled Congress all those years!!!!!!!!!!!!!!!!

How were Republicans supposed to control spending, by mental telepathy?

Reagan mentioned Entitlement reform and the LMSM went Batshit crazy on him

And what about from 1994 to 2006? Do those years just not count? Again, Republicans controlled the Senate from 1981 to 1987 too. Reagan could of also vetoed any bill he didn't like.

This is so tiring. So so tiring. Mental Patients at least know they're crazy but explaining the same thing to Modbert time after time after time is just absurd.

OK, one last time: Reagan never controlled Congress. OK. Can you grasp that? Why don't you repeat it for me one time so I know it sunk it?

Tip O'Neill who controlled the House promised him spending cuts, then never delivered.

Right Reagan, could have vetoed every spending bill and shut down the government. Sure. That's how reality works.

This isn't about Bush Delay and their Progressive Domestic agenda, this is about Reagan.

Delay and Bush spent like Democrats.
 
Read Stockman's book. He will tell you that it was the Republicans who believed this fairy tale that you can cut taxes and the growth will create enough revenue to pay for government spending, and it was the Supply-Siders who argued for it in budget negotiations, not just Democrats.

The Republican Party used to believe in fiscal discipline. Its long past that. Now it believes in All Tax Cuts All the Time, no matter what the fiscal consequences.

When I see the Tea Party people with signs that say "Cut MY Social Security" then I'll know the party is serious. Otherwise, it is merely continuing to perpetuate an intellectual fraud that it has for the past 30 years.

Democrats controlled Congress all those years!!!!!!!!!!!!!!!!

How were Republicans supposed to control spending, by mental telepathy?

Reagan mentioned Entitlement reform and the LMSM went Batshit crazy on him

Oh, bullshit.

Republicans were arguing that that Reagan didn't have to cut spending. They were called "Supply-Siders." But it's convenient for Republicans who have deified Reagan to conveniently forget this and re-write history because they have contributed enormously to the budget deficits that they now claim to be so concerned about. The fiscally responsible Republicans were were pushed aside by the All Tax Cuts All the Time wing that has come to dominate the party.

THAT is why Stockman left, not because of Democrats.

So what happened when Regan proposed to cut spending by closing the Department of Education? Did he get that? Did he get ANY Spending cuts by the Dem controlled Congress?

(Hint: NO!)
 
This is so tiring. So so tiring. Mental Patients at least know they're crazy but explaining the same thing to Modbert time after time after time is just absurd.

OK, one last time: Reagan never controlled Congress. OK. Can you grasp that? Why don't you repeat it for me one time so I know it sunk it?

Tip O'Neill who controlled the House promised him spending cuts, then never delivered.

Right Reagan, could have vetoed every spending bill and shut down the government. Sure. That's how reality works.

This isn't about Bush Delay and their Progressive Domestic agenda, this is about Reagan.

Delay and Bush spent like Democrats.

See Toro's post above. Also, the Democrats never had a monopoly control over Congress like you would seemingly have us to believe.

Reagan spent like a "Democrat" too, or do you seemingly forget that part of the story?

Also, yes, Reagan could of vetoed or threaten to veto for a compromise.
 
This is so tiring. So so tiring. Mental Patients at least know they're crazy but explaining the same thing to Modbert time after time after time is just absurd.

OK, one last time: Reagan never controlled Congress. OK. Can you grasp that? Why don't you repeat it for me one time so I know it sunk it?

Tip O'Neill who controlled the House promised him spending cuts, then never delivered.

Right Reagan, could have vetoed every spending bill and shut down the government. Sure. That's how reality works.

This isn't about Bush Delay and their Progressive Domestic agenda, this is about Reagan.

Delay and Bush spent like Democrats.

See Toro's post above. Also, the Democrats never had a monopoly control over Congress like you would seemingly have us to believe.

Reagan spent like a "Democrat" too, or do you seemingly forget that part of the story?

Also, yes, Reagan could of vetoed or threaten to veto for a compromise.

Totally pointless. People with triple lobotomies have better time understanding.

Reagan got a compromise! He asked for tax cuts, spending cuts and a military build up, he got 2 out of 3 and changed the course of history.

Blaming GOP for New Deal and Great Society programs that continue to soak 2/3 of the budget, that's fucking classic right there!
 
So what happened when Regan proposed to cut spending by closing the Department of Education? Did he get that? Did he get ANY Spending cuts by the Dem controlled Congress?

(Hint: NO!)

NOT JUST THE F****** DEMOCRATS! IT WAS REPUBLICANS TOO!

Are you not paying attention? Cheney said "Reagan showed that deficits don't matter." Fricking Cheney, the minority whip under Reagan!

Good fucking Lord. The GOP controlled the Presidency for eight years and the Senate for six years and had all those Reagan Democrats on his side and Reagan slayed the Evil Empire, but it was the big ole meanie Democrats and that baddie northeastern liberal Tip O'Neil who slapped the Gipper down. I didn't realize Reagan was such a fucking eunuch.

Spending as a percentage of GDP rose under Reagan from 33.5% to 35%!

usgs_line.php


The denial and revisionism is stunning. FFS, if Reagan rose from the grave to tell the GOP that they are wrong, Republicans still wouldn't believe him, given how deeply embedded the mythology has seeped into the party.
 
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This is so tiring. So so tiring. Mental Patients at least know they're crazy but explaining the same thing to Modbert time after time after time is just absurd.

OK, one last time: Reagan never controlled Congress. OK. Can you grasp that? Why don't you repeat it for me one time so I know it sunk it?

Tip O'Neill who controlled the House promised him spending cuts, then never delivered.

Right Reagan, could have vetoed every spending bill and shut down the government. Sure. That's how reality works.

This isn't about Bush Delay and their Progressive Domestic agenda, this is about Reagan.

Delay and Bush spent like Democrats.

See Toro's post above. Also, the Democrats never had a monopoly control over Congress like you would seemingly have us to believe.

Reagan spent like a "Democrat" too, or do you seemingly forget that part of the story?

Also, yes, Reagan could of vetoed or threaten to veto for a compromise.

Totally pointless. People with triple lobotomies have better time understanding.

Reagan got a compromise! He asked for tax cuts, spending cuts and a military build up, he got 2 out of 3 and changed the course of history.

Blaming GOP for New Deal and Great Society programs that continue to soak 2/3 of the budget, that's fucking classic right there!

Isn't spending cuts and military buildup inherently contradictory requests?
 

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