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Should Government Try To Extend Booms Indefinitely?
Be prepared for the next great transfer of wealth. Buy physical silver and storable food.
lewrockwell.com / By William L. Anderson / April 6, 2013
In 1982, David A. Stockman, a former Michigan congressman turned budget director for President Ronald Reagan, gave a series of interviews to socialist William Greider who subsequently published an article in Rolling Stone entitled, “The Education of David Stockman.” The article portrayed someone who had come into the administration hopeful that the free-spending ways of the 1960s and 70s would be ended and that the U.S. Government would embrace fiscal sanity, but had become delusioned by the whole process.
Because the U.S. economy at the time was mired in a deep recession, and because Stockman was not singing the same happy tune that everyone in the Reagan administration was supposed to be voicing, the article effectively destroyed Stockman’s career in the Republican Party. Democrats seized on comments such as Stockman’s description of the Kemp-Roth tax cuts as “trickle-down” to push their own agenda of high marginal tax rates and more government spending, while Republicans accused Stockman of being disloyal to his boss.
Democrats and many Republicans, aghast at the double-digit unemployment rates and the rise of interest rates into double-digits as well (home mortgages were at about 15 percent – if one could qualify for one at all), called for the Federal Reserve System under Chairman Paul Volcker to reflate the money supply, and Democrats called for a return of the 70 percent top rates. To his credit, Volcker withstood the pressure, although Reagan repaid him by appointing the “flexible” Alan Greenspan in his place in 1987. Two major financial bubbles later, Greenspan has his legacy.
In the interview, Stockman did not lament lower tax rates and certainly was not repudiating free markets, as Democrats and Republican critics were claiming, but rather was noting the fact that after Republicans managed to cut the top tax rate from 70 percent to 50 percent, the party no longer was interested in cutting the federal budget. Part of the reason, one should add, was that even small cuts first proposed by Stockman when the administration trotted out its first budget in 1981, were savaged in the media and by just about everyone else in the political establishment and most Republicans ran for cover rather than spending political capital to stop funding Big Bird.
Thanks to BrotherJohnF
2013-04-06 09:17:28
Source: http://silveristhenew.com/2013/04/06/should-government-try-to-extend-booms-indefinitely/
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