While I was over at the Fiscal (not Financial) Times getting the word about the New Normal I noticed an interview with Ronald Reagan’s Budget Director David Stockman. He had some interesting things to say about how we got into this mess:
http://www.thefiscaltimes.com/Issues...al-Bottom.aspx
The Fiscal Times (TFT):* What should the president and Congress do about the*Bush tax cuts this year?**
David Stockman (DS):* The two parties are in a race to the fiscal bottom to see which one can bury our children and grandchildren deeper in debt. The Republicans were utterly untruthful when they recently pledged no tax increases for anyone, anytime, ever. The Democrats are just as bad — running their usual campaign of political terror on social security and other entitlements while loudly exempting all except the top 2 percent of taxpayers from paying more for the massively underfunded government they insist we need
The fact is, the Bush tax cuts were unaffordable when enacted a decade ago. Now, two unfinanced wars later, and after a massive Wall Street bailout and trillion-dollar stimulus spending spree, it is nothing less than a fiscal travesty to continue adding $300 billion per year to the national debt. This is especially true since these tax cuts go to the top 50 percent of households, which can get by, if need be, with the surfeit of consumption goods they accumulated during the bubble years. So Congress should allow the Bush tax cuts to expire for everyone. By doing nothing, the government would be committing its first act of fiscal truth-telling in decades.
TFT:* You spent many years as a public official. What do you consider your greatest contribution?
DS:* For a flickering moment I helped revive a vision of small government based on low taxes, the denial of weak fiscal claims rather than weak clients, and social progress through liberation of the nation’s entrepreneurial endowments and energies. But that vision has been subsequently crushed by 30 years of fiscal profligacy, warfare state adventurism and crony capitalist policies championed by the lobbies of K Street, the financiers of Wall Street and the farmers, homebuilders, energy producers and sick-care companies of Main Street. After the abomination of the Bush/Paulson bailout of the big banks, the state has no boundaries whatsoever. So fiscal policy is now just a fiscal food fight.
TFT:* Your assessment of the Obama's presidency at this point?*
DS:* Obama’s presidency is a profound disappointment. So far, he’s proven that when Republican’s start elective wars, Democrats can’t end them; when Republicans empty the Treasury, Democrats can’t replenish it; when Republicans put a middle-class destroying money printer at the head of the Fed, Democrats reappoint him; and when the Republicans unleash an orgy of dangerous speculation on Wall Street, Democrats pass a contentless, 2,300 page, enabling act which will do nothing to protect Main Street from another financial meltdown, even as it keeps K Street fully employed.
TFT:* What will happen to health care if the Republicans become the majority party?*
DS:* Health care accounts for 17 percent of GDP and is the dysfunctional heartland of crony capitalism. They only thing which will change if the GOP becomes the majority is that the RNC will collect more of the vigorishes.
I had to look up “vigorishes” -
vigorish - 2 dictionary results
vig·or·ish [vig-er-ish]
–noun Slang .
1.a charge paid on a bet, as to a bookie.
2.interest paid to a moneylender, esp. a usurer.
Origin:
1910–15, Americanism ; *earlier viggresh, *perh. < an adaptation in Yiddish slang of Ukrainian výgrash *or Russ výigrysh *winnings, profit
It would appear that “payoffs” would fit as well. Notice that when he denounces 30 years of “fiscal profligacy” that goes back to the beginning of the Reagan Administration which he himself was a prominent part of. Feeling a bit of remorse it would appear. It is a pity that the scales never fall from these guys eyes until they are out of office. For what it is worth Mr. Stockman’s prescription for what to do about the Great Recession: cut spending & raise taxes immediately, are completely wrong, IMO, but he isn’t an economist.
Remember David Stockman?
