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Farrell writes: "In the past 40 years Republican ideology has gone from solid principles to hype and slogans. Stockman says: '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.'"

President Ronald Reagan offers youthful budget director David Stockman some jelly beans during a budget meeting in the 1980s. (photo: Bettmann/Corbis)
President Ronald Reagan offers youthful budget director David Stockman some jelly beans during a budget meeting in the 1980s. (photo: Bettmann/Corbis)

Reagan Insider: 'GOP Destroyed US Economy'

By Paul B. Farrell, MarketWatch

10 August 10


This piece first ran on MarketWatch on Aug. 10, 2010. The 'insider' referred to in the title is the former economic wunderkind of Reaganomics - David Stockman. -- JPS/RSN


How: Gold. Tax cuts. Debts. Wars. Fat Cats. Class gap. No fiscal discipline.

ow my GOP destroyed the US economy." Yes, that is exactly what David Stockman, President Ronald Reagan's director of the Office of Management and Budget, wrote in a recent New York Times op-ed piece, "Four Deformations of the Apocalypse."

Get it? Not "destroying." The GOP has already "destroyed" the US economy, setting up an "American Apocalypse."

Yes, Stockman is equally damning of the Democrats' Keynesian policies. But what this indictment by a party insider - someone so close to the development of the Reaganomics ideology - says about America, helps all of us better understand how America's toxic partisan-politics "holy war" is destroying not just the economy and capitalism, but the America dream. And unless this war stops soon, both parties will succeed in their collective death wish.

But why focus on Stockman's message? It's already lost in the 24/7 news cycle. Why? We need some introspection. Ask yourself: How did the great nation of America lose its moral compass and drift so far off course, to where our very survival is threatened?

We've arrived at a historic turning point as a nation that no longer needs outside enemies to destroy us, we are committing suicide. Democracy. Capitalism. The American dream. All dying. Why? Because of the economic decisions of the GOP the past 40 years, says this leading Reagan Republican.

Please listen with an open mind, no matter your party affiliation: This makes for a powerful history lesson, because it exposes how both parties are responsible for destroying the US economy. Listen closely:

Reagan Republican: The GOP Should File for Bankruptcy

Stockman rushes into the ring swinging like a boxer: "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 ... will soon reach $18 trillion." It screams "out for austerity and sacrifice." But instead, the GOP insists "that the nation's wealthiest taxpayers be spared even a three-percentage-point rate increase."

In the past 40 years Republican ideology has gone from solid principles to hype and slogans. Stockman says: "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."

No more. Today there's a "new catechism" that's "little more than money printing and deficit finance, vulgar Keynesianism robed in the ideological vestments of the prosperous classes" making a mockery of GOP ideals. Worse, it has resulted in "serial financial bubbles and Wall Street depredations that have crippled our economy." Yes, GOP ideals backfired, crippling our economy.

Stockman's indictment warns that the Republican party's "new policy doctrines have caused four great deformations of the national economy, and modern Republicans have turned a blind eye to each one:"

Stage 1. Nixon Irresponsible, Dumps Gold, US Starts Spending Binge

Richard Nixon's gold policies get Stockman's first assault, for defaulting "on American obligations under the 1944 Bretton Woods agreement to balance our accounts with the world." So for the past 40 years, America's been living "beyond our means as a nation" on "borrowed prosperity on an epic scale ... 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."

Remember Friedman: "Just let the free market set currency exchange rates, he said, and trade deficits will self-correct." Friedman was wrong by trillions. And unfortunately "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."

And without discipline America was also encouraging "global monetary chaos as foreign central banks run their own printing presses at ever faster speeds to sop up the tidal wave of dollars coming from the Federal Reserve." Yes, the road to the coming apocalypse began with a Republican president listening to a misguided Nobel economist's advice.

Stage 2. Crushing Debts From Domestic Excesses, War Mongering

Stockman says "the second unhappy change in the American economy has been the extraordinary growth of our public debt. In 1970 it was just 40% of gross domestic product, or about $425 billion. When it reaches $18 trillion, it will be 40 times greater than in 1970." Who's to blame? Not big-spending Dems, says Stockman, but "from the Republican Party's embrace, about three decades ago, of the insidious doctrine that deficits don't matter if they result from tax cuts."

Back "in 1981, traditional Republicans supported tax cuts," but Stockman makes clear, they had to be "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."

OK, stop a minute. As you absorb Stockman's indictment of how his Republican party has "destroyed the US economy," you're probably asking yourself why anyone should believe a traitor to the Reagan legacy. I believe party affiliation is irrelevant here. This is a crucial subject that must be explored because it further exposes a dangerous historical trend where politics is so partisan it's having huge negative consequences.

Yes, the GOP does have a welfare-warfare state: Stockman says "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."

When Fed chief Paul Volcker "crushed inflation" in the '80s we got a "solid economic rebound." But then "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 2009, they "reduced federal revenues to 15% of gross domestic product," lowest since the 1940s. Still today they're irrationally demanding an extension of those "unaffordable Bush tax cuts [that] would amount to a bankruptcy filing."

Recently Bush made matters far worse by "rarely vetoing a budget bill and engaging in two unfinanced foreign military adventures." Bush also gave in "on domestic spending cuts, signing into law $420 billion in nondefense 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." Takes two to tango.

Stage 3. Wall Street's Deadly 'Vast, Unproductive Expansion'

Stockman continues pounding away: "The third ominous change in the American economy has been the vast, unproductive expansion of our financial sector." He warns that "Republicans have been oblivious to the grave danger of flooding financial markets with freely printed money and, at the same time, removing traditional restrictions on leverage and speculation." Wrong, not oblivious. Self-interested Republican loyalists like Paulson, Bernanke and Geithner knew exactly what they were doing.

They wanted the economy, markets and the government to be under the absolute control of Wall Street's too-greedy-to-fail banks. They conned Congress and the Fed into bailing out an estimated $23.7 trillion debt. Worse, they have since destroyed meaningful financial reforms. So Wall Street is now back to business as usual blowing another bigger bubble/bust cycle that will culminate in the coming "American Apocalypse."

Stockman refers to Wall Street's surviving banks as "wards of the state." Wrong, the opposite is true. Wall Street now controls Washington, and its "unproductive" trading is "extracting billions from the economy with a lot of pointless speculation in stocks, bonds, commodities and derivatives." Wall Street banks like Goldman were virtually bankrupt, would have never survived without government-guaranteed deposits and "virtually free money from the Fed's discount window to cover their bad bets."

Stage 4. New American Revolution: Class-Warfare Coming Soon

Finally, thanks to Republican policies that let us "live beyond our means for decades by borrowing heavily from abroad, we have steadily sent jobs and production offshore," while at home "high-value jobs in goods production ... trade, transportation, information technology and the professions shrunk by 12% to 68 million from 77 million."

As the apocalypse draws near, Stockman sees a class-rebellion, a new revolution, a war against greed and the wealthy. Soon. The trigger will be the growing gap between economic classes: No wonder "that during the last bubble (from 2002 to 2006) the top 1% of Americans - paid mainly from the Wall Street casino - received two-thirds of the gain in national income, while the bottom 90% - mainly dependent on Main Street's shrinking economy - got only 12%. This growing wealth gap is not the market's fault. It's the decaying fruit of bad economic policy."

Get it? The decaying fruit of the GOP's bad economic policies is destroying our economy.

Warning: This Black Swan Won't Be Pretty, Will Shock, Soon

His bottom line: "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 ... 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."

Wrong: There are far bigger things to "pity."

First, that most Americans, 300 million, are helpless, will do nothing, sit in the bleachers passively watching this deadly partisan game like it's just another TV reality show.

Second, that, unfortunately, politicians are so deep-in-the-pockets of the Wall Street conspiracy that controls Washington they are helpless and blind.

And third, there's a depressing sense that Stockman will be dismissed as a traitor, his message lost in the 24/7 news cycle ... until the final apocalyptic event, an unpredictable black swan triggers another, bigger global meltdown, followed by a long Great Depression II and a historic class war.

So be prepared, it will hit soon, when you least expect. your social media marketing partner


A note of caution regarding our comment sections:

For months a stream of media reports have warned of coordinated propaganda efforts targeting political websites based in the U.S., particularly in the run-up to the 2016 presidential election.

We too were alarmed at the patterns we were, and still are, seeing. It is clear that the provocateurs are far more savvy, disciplined, and purposeful than anything we have ever experienced before.

It is also clear that we still have elements of the same activity in our article discussion forums at this time.

We have hosted and encouraged reader expression since the turn of the century. The comments of our readers are the most vibrant, best-used interactive feature at Reader Supported News. Accordingly, we are strongly resistant to interrupting those services.

It is, however, important to note that in all likelihood hardened operatives are attempting to shape the dialog our community seeks to engage in.

Adapt and overcome.

Marc Ash
Founder, Reader Supported News

-38 # robbak11 2011-10-05 20:06
Hey Paul, I realize you needed to write something to justify your weekly envelope, but it would have been enormously more useful to tell us what Stockman had said without slicing and dicing it the way you have. The result lacks coherence and really detracts from the fascinating spectacle of a competent old-school Republican taking his party to task.
+46 # PhilO 2011-10-06 00:45
If you want to know exactly what Stockman wrote you can read it here:
+17 # PiscesCurveUS 2011-10-06 01:40
Then again, there's also Dr. Paul Craig Roberts, Assistant Secretary of the US Treasury from 1981-82, and an often cited "co-founder of Reaganomics." I suppose Mr. Stockman would be the other "co-founder."

The horse is dead, period; regardless of whether certain GOP types wish to conduct their version of the USSR train joke (and of course the corp. media cartel cover for the spiel).

Here's a Wikipedia version:
"Vladimir Lenin, Joseph Stalin, Nikita Khrushchev and Leonid Brezhnev are all travelling together in a railway carriage. Unexpectedly the train stops. Lenin suggests: 'Perhaps, we should call a subbotnik, so that workers and peasants fix the problem'. Stalin puts his head out of the window and shouts, 'If the train does not start moving, the driver will be shot!' But the train doesn't start moving. Khrushchev then shouts, 'Let's take the rails behind the train and use them to construct the tracks in the front'.(A hint to Khrushchev's various reorganizations .) But it still doesn't move. Brezhnev then says, 'Comrades, Comrades, let's draw the curtains, turn on the gramophone and pretend we're moving!' (A hint to Brezhnev stagnation.)
+25 # Bill Clements 2011-10-06 08:04
Are you actually too lazy to click over to the NYT's and find the article? Personally, I found his "corrections" edifying and closer to the reality all of us are living through presently.
+95 # TGMisanthrope 2011-10-05 20:43
Although rather depressing, it was good to read a nonpartisan article that lucidly lays blame where it's due. Just because the Democrats are less culpable--perha ps, or maybe they're just better at appearing concerned--than the Republicans doesn't mean that one should vote a straight party ticket. Educate yourselves; learn to think critically; vote for the best candidates regardless of affiliation. And after the election, if your candidate of choice wins, see to it that they keep their word. Make "of the people, for the people" reality.
+20 # OpenMind 2011-10-06 07:26
Quoting TGMisanthrope:
And after the election, if your candidate of choice wins, see to it that they keep their word. Make "of the people, for the people" reality.

Yeah, it would be wonderful if we were able to see that Obama kept his word - in his actions rather than re-election rhetoric. As we know now, both parties are in bed with the wealthy and corrupt of this country. Time to grow a spine.
+41 # chick 2011-10-06 07:26
TGMisanthrope the only problem, I do not see one Republican doing or saying anything to help the American people.
On the other hand I see and hear many Democrats doing and saying things to help the American people.

So sorry my vote is straight line Democrat until I see a big change in the Republican party which I have not seen for years and years and that my friend is 70 years of voting.
-31 # Martintfre 2011-10-06 09:48
//TGMisanthrope the only problem, I do not see one Republican doing or saying anything to help the American people.//

And when there is - Like Ron Paul - I bet you refuse to listen.
+7 # TGMisanthrope 2011-10-06 17:55
chick: I think you missed my point. Not all Democratic candidates are identical; not all Republican candidates are identical; not all third, fourth, fifth, etc. party candidates are identical. Study the candidates as individuals then vote accordingly.
+75 # Virginia 2011-10-05 22:40
One World / New World Order doesn't work - it's financial socialism. But more than that it's allowing criminals to run the financial markets. The Fed may go down, however, if the states would grow some testicular fortitude - takeover the real estate that the Wall Street banksters fraudulently stole from the masses, they could begin to stabilize their economies. Obama and Congress have been unsuccessful at stopping the fall so let's stop following them to the edge of the cliff.

There were only 6 million people in the Holocaust count. America has over 24 million homes X 2.5 per household = 60 million people with another 72 million people on the horizon losing their shelter, their families, their retirement and their lives.  I think we have allowed the existence of moral turpitude and surpassed the magnitude of the Holocaust by our failure to respond. 

I don't know about you, but with my tax dollars - "Save American families first - the banks can go to Capitalism hell." 
-9 # madams12 2011-10-05 23:49
In fact though one might assume that there were "only" 6 million who died in fact it was somewhere between 25 and 40 MILLION ...but what has happened is the misery of World War 2 has been copyrighted by zionists for political its no wonder that folks focus on that 6 Million number. However, having visited Auschwitz Birkenau in 1998 I know that the official brass plaque outside the camp was even that 6 million figure is erroneous. pls view this site for further information:
+5 # Capn Canard 2011-10-06 07:47
Apparently the Chinese word for "opportunity" is the same, or very similar, to the English word for "crisis". The vast majority of Americans are completely unaware that the Russians lost over 11 million during WWII. 80% of Nazi Army casualties were on the RUSSIAN FRONT. It be could said without to much hyperbolic ranting that the U.S.S.R. defeated the Nazis and America took credit like a vulture picking over a carcass. The Israelis used the same tactics to displace the Palestinians from Palestine.
+4 # bluebluesdancer 2011-10-06 11:54
Not to lessen our gratitude to the Russians for overcoming the Nazis, but three things you didn't mention also had a major influence on the result of the war.
1) Hitler pretty-much ignored the troops in Russia, sending them without food or virtually any form of support, so they were starving.
2) Mother Nature froze them, and many of them died due to lack of warmclothing.
3) So many Russians died partly because their military syatem was outdated, and they used the old-fashioned method of "Charge!", and the front line were always just cannon-fodder.
I'm not saying you are wrong, I'm just adding some perspective.
+9 # Capn Canard 2011-10-06 15:29
bluebluesdancer , absolutely! and that is the arrogance of power in action, we here in the west were fortunate that there were so many Russians and so much territory that the Nazi's had no real way to conquer such a vast landscape. The Russian Soldiers were very under equipped, just like in WW 1, or even during the Napoleonic debacle. Despite that, all three attempts failed. Not unlike trying to conquer Afghanistan. It is s such difficult landscape...
+6 # KittatinyHawk 2011-10-06 08:19
No one counts the bodies, much was lost and since we do not know just how long the experiment in evil had been started the count of workers, catholics, derilects, jews will never be known. He probably and those with sadistic needs killed blacks, asians, middle easterners also. After all it was to be blond and blue eyes.
Everyone was a Victim, not just one race, same now. One doesnot have to be murdered to be a Victim anymore
+22 # Angel 2011-10-06 01:02
It seems there's a huge lack of intelligence in politics today. I keep thinking if there a few changes made, solutions--this would all start to turn around. 1. If a qualifying psyche exam were given--as is to all airline pilots--for politicians, it would weed out the crazies who can't stop themselves from traitorous self enrichment of taking money from the bad guys. 2. If there were a law AGAINST people making money from stock market failures---ther e would be less incentive for failure. Just two ideas. I wish.......
-16 # Martintfre 2011-10-06 07:56
//America has over 24 million homes X 2.5 per household = 60 million people with another 72 million people on the horizon losing their shelter, their families, their retirement and their lives. //

foolish hyperboli - show me the gas chambers - just one where they victims were marched to their death?
Where are the campaigns endlessly screamed about by the politicians damming some group or another - where is the krystal night or night of the long knives?

ignorance of history is a poor excuse to gin up pity
+8 # pbbrodie 2011-10-06 10:30
I was so glad to see your comments. I was horrified to see what Virginia wrote, trying to make some obscene analogy between the Holocaust and what's happening today but I was then even more horrified and appalled to see all of the positive votes she got from fellow readers!
First, Virginia's numbers are insultingly and unbelievably incorrect, "There were only 6 million people in the Holocaust count."
A quick search on the Internet resulted in this:
"Current estimates based on documents from Nazi war records, and official government documents of various countries, place the death toll of people murdered by the Nazis during the Holocaust as conservatively over 15 million non-combatant people."
Overlooked Millions: Non-Jewish Victims of the Holocaust
Karen Silverstrim
University of Central Arkansas
It isn't difficult to use facts when writing comments and using them make your comments much more relevant and meaningful.
To attempt to compare what is happening in the US today with the Holocaust is simply absurd and is an insult to all of the innocents who died at the hands of the Nazis.
+17 # Virginia 2011-10-06 12:15
You simply miss the point. The number of victims in the atrocity that was ignored by the US. We may not have ovens but we have storm troopers that invade these homes under the guise of EJECTMENT officers and forcibly remove families, change locks and throw away their belongings. The empty homes are not being rented because the banks don't want the liability and expense. People are forced to the streets in tents. The ostrich attitude by the administration has left a lot of dead bodies in it's wake. Suicides, heart attacks, sudden disease caused by emotional stress...the numbers are mounting without the ovens. Washington, DC has allowed the rape of the American Dream and it was not necessary. They could have reduced the interest rate to 2% and stripped the inflated mortgages to market value and the majority of people could have kept their homes and stabilized the economy. Instead they have allowed the eviction storm troopers the seize the properties and displace the families...and the numbers exceed all the figures bandied about in the atrocious Holocaust. Death, depression and despair, foreclosure too is an atrocity of untold magnitude.
-10 # 2011-10-06 23:13
Virginia, your analogy is moronic and qualitatively ABSURD. Comparing human beings who were burned to death in gas chambers to people losing their homes due to inflated mortgage rates and foreclosure is not only moronic butinhumane.You r commentis illogical.
+6 # Capn Canard 2011-10-06 15:38
Yeah, I believe that Virgina's was a bit hyperbolic, but there is a real sense that those in power(banksters , county, city,state and federal authorities) often go too far. As am example, if not foreclosure, then the failed "War on Drugs". Where it is not uncommon for innocents to be killed by police because of misinformation from police "sources"/snitc hes/informants. Real innocent people have been killed in their own homes. This is an unforgivable crime committed by the state. Will we ever pull back and question our motives? More importantly, can we fix stupid?
+28 # Regina 2011-10-05 23:22
Is there an insane asylum big enough to house all the insane connivers who did this to us, and all the perverts who think those instigators are right?? And who are so crazy that they insist that more of the same is the way to go??? When a Reagan acolyte tells us that we've been duped and scalped, it's time for a BIG reversal away from Grover Norquist's cliff.
+26 # KittatinyHawk 2011-10-06 08:21
Everyone my age knew that ReaGun was no good...nobody would listen to us. Older people like my mother's generation could not believe he could do any wrong. Foolish many cut their noses off to spite their face. Now everyone must pay for letting the demons loose.
-7 # madams12 2011-10-05 23:32
I'd say that though he expresses what the MAJORITY of American public is already saying....I think he is a BIG FAT HYPOCRITE...jus t another bottom read about HIS indictment: (2007)...
+13 # badbenski 2011-10-06 01:15
Everywhere one turns the game is rigged. Money is being sucked upward, never to return to the economy in any meaningful way & we're all just waiting for the crash, depression, desperation, food riots, etc. Yes, I said "food riots! In order to eliminate the cost of warehousing large inventories, the U.S. operates on the Japanese model just-in-time inventory philosophy. A small series of glitches can easily disrupt the pipeline of goods and shortages will be made manifest in relatively short order. And then what? As more turmoil results, the flow of goods will be terminally truncated and the people will look to the government for solutions. They (the government) will, or course, insist upon the surrender of all privately held weapons along with the cessation of those few civil rights that remain. After a calculated and sanctioned "die-off" and detention of "disruptive elements," those who remain will gladly slip on whatever literal and figurative chains the government issues and the American people will experience the tender mercies of the New World Order in much the same way as the rest of the world. It is at this point that remaing Americans will realize the true nature of the long term deception. However, they will be helpless to do anything about it except mourn the loss of the greatest nation to ever exist upon this Earth, defeated with a whimper & not a bang.
+8 # KittatinyHawk 2011-10-06 08:28
Weather in past two years are hurting growers who actually produce food for People not stupid Cattle. Another American obsession is you realize the land, grain that is raised for these stupid creatures? Do you realize the sewage used for fertilizer, soon fish fertiziler from the East with radiation? Than there is the oxymoron practice still today to pay farmers Not to Grow Food.
Organic, small local farmers cannot afford that. I promote Local Farmers vs six month old veggies that now are spreading disease (most coming from sewage applications).
Your stores want to stop labeling, heck most people do not read label, the food snobs are more interested in some elitist need yet where is the food coming from.
Let someone else do it, motto of the Lazy. Well, someone else has been doing it with your money, your investments, your stay sleeping, it will probably be better in the long run.
+4 # PiscesCurveUS 2011-10-06 01:19
Black and white jelly beans from Adam Smith (cut more); red and green ones from Karl Marx (borrow more).
+25 # angelfish 2011-10-06 02:17
At LONG last, a Truthful and Honest Republican! I thought they had been completely wiped out by the Fascist ReTHUGlicans of the Koch brothers/Grover Norquist ilk. Any other SANE and REASONABLE folks out there who USED to be Republicans like Mr. Stockman? If there are, STAND up and be COUNTED! If the Fascist ReTHUGs don't wake up soon, they will succeed in, not only destroying US but the World as we once knew it! They need to be IMPEACHED and/or voted out of office ASAP! The likes of Mitch "Aunt Blabby" McConnell, Lindsey Graham, Jim DeMint, Joe Wilson, Eric Cantor and the rest of the "MY way or NO way" Fools, head the list of egregious Destroyers! Their "Party over People" INANE ideology has done more to harm this Country than Osama Bin Ladin, Al Queda and/or the Taliban ever THOUGHT of doing! RePudiate them!
+48 # Barbara K 2011-10-06 06:21
It took this long to destroy our economy and the teabagging republicans are trying to blame Obama because in 2 1/2 years it has not yet been fixed? They are so hypocritical. The Greedy Old Pigs should never be allowed to hold a seat in our government.

VOTE STRAIGHT DEMOCRATIC, the alternative is too devastating.
+11 # RLF 2011-10-06 06:27
This Milton Friedman dick and his voodoo propaganda economics has reigned long enough. I'm sick to death of hearing that it is a global market...Hell it isn't even a hyper local market when you have diparities of wealth like we have. Politicians of both ilks are guilty of intellectual laziness to still speak about this guy and his crap!
-69 # Martintfre 2011-10-06 06:40
YEA it is the republicans fault -- because they started to act and spend like democrats.
+36 # chick 2011-10-06 07:36
It most certainly was and is the Republicans fault.

The Democrat spending was always to help the American people, middle and poor.

The Republican's spending was always for War, to lower taxes on the wealthy and corporations. That is what caused the disparity between the wealthy and middle class which is slowly disapearing into poor.
-37 # Martintfre 2011-10-06 09:54
Republicans are for the warfare state - that is why Obombya is not impeached for the unconstitutiona l war in Libya.

Democrats are for the welfare state - that is why plans like social security are promoted as a success and the 2.7 trillion of IOU's (Government Securities) is called an asset.

We can not afford either one - but they get together - compromise and we have both. So why do we have 15 trillion in admitted debt again?
+31 # Dick Huopana 2011-10-06 07:33
Reaganomics and GOP power politics have have brought the U.S. to the brink of a Depression and a collapsing society.

Reaganomics is simply: Making the economy increasingly dependent upon ever-growing military spending, tax cuts, deficit budgeting and continuous inflation.

The unaffordable military spending is funded by borrowing - i.e., postponing levying the taxes needed to fund Cold and Hot Wars, etc. for future generations to pay.

The tax cuts - enabled by budget deficits and postponing taxes - buy the Republicans lots of votes from fiscally illiterate voters. And, continuous inflation falsely creates the illusion that higher property values, salaries, stock portfolios, etc are making us all more wealthy.

Unfortunately, Reaganomics remains our government's fiscal policy. A good indicator of the policy's performance is the federal government's (actually taxpayers') debt. When Reagan was first inaugurated in 1981, the debt was $930 BILLION; today it is $ $14.9 TRILLION!
Moreover, since Reagan's 1981 inauguration, the debt's interest has totaled $8.5 trillion!

Clearly, our country needs a new, much more responsible fiscal policy. Unfortunately, our federal government seems incapable of making that happen.

Good luck to us all.
+18 # Dick Huopana 2011-10-06 12:21
Three more points about my comment above:

1) The U.S. is still being touted as the world's richest country. Yet, during the past 30 years, Reaganomics has indebted the federal government (actually taxpayers) with an additional $13.9 trillion. Add that to the debt of the private sector of GDP - corporations (especially major banks), households, etc and it seems like we are now one of the world's poorer countries.

2) The above $13.9 trillion of debt attributed to Reaganomics includes $8.5 trillion of debt interest. Had Reagan fulfilled his election campaign promise to promptly eliminate budget deficits and repay the $930 billion debt he inherited, perhaps $8 trillion of interest could have been avoided reducing today's debt to $5.9 trillion. Moreover, that $5.9 trillion of debt could have also been avoided by more responsible spending and/or the equivalent of a one-time tax increase of roughly $200 billion over the last 30 years.

3) Why haven't economists - or even high school students - discredited Reaganomics and Republican's years of repeated calls for tax cuts with an analysis similar to mine above?
+26 # fredboy 2011-10-06 07:35
Republicans these days have lost the ability to understand the economy and, perhaps worst, to understand people.

Stockman is right--hell is coming as a result.
0 # gdp1 2011-10-06 07:45
The editorializing of Stockman by this confusing more than clarifying,alth ough I do agree w/him.
-30 # Martintfre 2011-10-06 07:53
//Finally, thanks to Republican policies that let us "live beyond our means for decades by borrowing heavily from abroad, // and the democrats never over spent, never made costly regulations that drove business and jobs over seas -
What a biased stupid lie.

BOTH Parties have been screwing us.
+16 # Capn Canard 2011-10-06 15:54
Martinfre, your post is strongly biased in favor of Republicans. I agree that both parties are screwing us, but the parties themselves are not the driver of the movement to send jobs out of country. The driver is the FAILED ECONOMIC SYSTEM that you are attempting to defend. If doesn't matter who is in the seat of political power, ECONOMIC POWER will screw you regardless. Localized control, local production, local food production/agri culture and a widespread commons of land, transit, education is the only answer that would actually work. Until then expect to suffer.
+20 # artful 2011-10-06 08:02
The GOP destroyed the US (economy)
+3 # 2011-10-06 08:04
I agreed with robbak11, but when I clicked the green thumbs up icon, it was recorded as a thumbs down. In any event, the article could have been organized a little better, though it makes valid points.
+19 # Isar 2011-10-06 08:33
Do you think President Obama has read this article by Stockman? Do you think he might begin reminding us all over again WHY we are in this economic mess? Do you think the Wall Street demonstrations, now spreading across the nation, will spur on the Democrats and their candidate to start laying the blame where it belongs? Do you think Obama will stop being "Mr. Nice-Guy?" Stay tuned, dear readers.
0 # John Locke 2011-10-06 09:09
No...Give up on Obama, he sold out to wall street
+11 # reiverpacific 2011-10-06 09:05
I don't think that this is such a bad article.
All things financial, so much beyond the comprehension of the likes of me, an economic twit by my own admission, seems unnecessary and hidden beyond "Chinese Walls" in different Wall Street brokerages, quietly leaked out for the benefit of the selected "Mandarins", must be "sliced and diced" so that some of us can understand these mostly abstract quantities which appears to dictate our very quality of life, not to mention quantity.
I especially like the last split paragraph, summing-up what we should already know; that both we of the many-headed AND most of the elected representatives , are sitting by helplessly just watching or burying well-coifed heads in the sand as the storms bears down on us with gathering force.
Freidman's Chicago School inhumane, merciless destroy-to-buil d policies have done more harm to economies and the environment worldwide than almost any other single force or doctrine, enforced by the war-machine which is it's natural partner and adopted by the IMF; I've seen the results up close in many countries.
I don't have any answers except than to try and live one day at a time and resist despair with humor, music, creativity and mutual aid at grassroots.
Not much I'm afraid -but better than the simplistic pap put out by the likes of the foregoing rubber-ducky!
-29 # Martintfre 2011-10-06 10:04
If we were to completely eat the worlds rich - I think a few months ago Forbes magazine places the value at about 5+ trillion then we could power the US government for a little over a year.

Never mind that the jobs from the companies they own would have been liquidated or that the trust funds and mutual funds that add value to federal, state and private employees would evaporate, but seriously where will we be in 14 months if we do not pare down spending (it has been soo nice for politicians to be liberal with other peoples money) ?

Exactly the same place we are now and no one to blame or at least eat.

As Milton Freedman observed::
The problem with a welfare state is it is not productive enough to support the welfare state.
-15 # Martintfre 2011-10-06 10:10
false premise: The reason Nixon dumped the gold standard (FDR did that earlier declaring US Citizens enemies of the state for possessing gold)
is we were already on a spending binge with printed money and we could not fulfill our obligations with Gold - so we gave the world fiat paper instead and promised it was as good as gold.

Since when is a politicians word as good as gold? Only Gold is as good as gold.
+22 # Nick Reynolds 2011-10-06 11:03
I agree with Stockman, and I'm glad he wrote that in the NY Times. But this author does not understand what John M. Keynes was talking about. To many, Keynesian economics just means running a deficit. That's not accurate.

Keynes believed gov'ts should balance the budget over time, not each year. In prosperous times, when people are spending, the gov't should run a surplus and slow down the economy. In times, like now, when people can't or won't spend, the gov't must step in, run a huge deficit, and boost aggregate spending. Right now the gov't needs to spend BIG, as if we were in a war. Otherwise we're not getting out of this, no matter who's in there, unless, of course, there's a war.

If you don't like deficits, then raise taxes. Repeal the Bush tax cuts on the wealthy.
Politicians since Nixon understand that spending when times are tough helps the economy. They don't understand running a surplus when times are good. But that's what Keynes said. Keynes was a rare genius. That's all there is to it. People should read him before they make pronouncements about economics.
-20 # Wink 2011-10-06 11:28
I continue to marvel at the "informed" critics who denounce "ever-growing" military spending. The reality is quite the opposite. Consider that US troop strength today is a small fraction of that 10 years ago, and even more so than 20 years ago. Navy ships have been mothballed, installations have been closed, and more are pending via the BRAC process. The "modern" Air Force inventory includes the B52- now in its 60th year of operation, C141s, C130s, F15s & F16s dating back to the late 60s, and long-since worn out KC135 tankers among others. TheF22 has been cancelled, and the F35 is likely to go the same route. The Army's Abrams tanks are likewise outdated and shot from extensive use, as are their helicopters, etc.

So what? you may reply. The "so what" is that the US is poorly prepared to respond to a significant (not major- just significant) emergency requiring military response. Today, we have no where near the capability to respond to a conflict of even limited scale such as Desert Storm in Iraq. Overseas basing has been reduced significantly, limiting rapid forward tactical positioning capability. This only encourages belligerents to execute aggressive action against our allies. Look for China to invade Taiwan and seize islands in the Sea of Japan, Arabs to again attack Isreal, etc., while we can only watch, and the UN does nothing. And the US?
+17 # Dick Huopana 2011-10-06 12:35
Wink, you marvel at critics like me who think our government's "ever-growing" government military spending is unaffordable and must be significantly reduced. You also say "the reality is quite the opposite." How about providing actual budget (and off-budget numbers showing military spending decreasing?
+7 # kyzipster 2011-10-06 22:14
And yet Iraq is estimated at $3 trillion.
+6 # Bill Clements 2011-10-07 20:37
Current military (2009): $965 billion
Past military spending: $484 billion,.

Total outlays (Federal Funds): $2,650 billion
Military: 54% and $1, 449 billion
Non-military: 46% and $1,210 billion.
+23 # RGG 2011-10-06 12:59
I'm so sick of the tired argument that regulation drove jobs overseas. Corporations send jobs overseas for one purpose to increase their greedy profits. And by the way the next time you fly you should be extremely grateful that the government regulates required maintenance on planes.
+13 # RGG 2011-10-06 13:15
Doesn't GOP stand for Greed Over Praticality?
+4 # angelfish 2011-10-09 10:59
Barbara K said it better. GOP = Greedy Old Pigs!
-19 # Wink 2011-10-06 13:31
Do your own research- the data is readily available. Meanwhile, keep your fingers crossed that we will never need that wasteful and expensive military capability (never mind what history tells us otherwise.) Closing thought-- freedom isn't free.
+12 # Dick Huopana 2011-10-06 14:37
Your reply tells me that you can't find any budget data to prove military spending hasn't been significantly increasing during the past 30 years of Reaganomics.
Advice:Don't make allegations that go out on the world-wide web that you can't back up with factual data.
+3 # Mishkyn 2011-10-06 17:53
Gold Standard? President Kennedy placed the US back onto the Gold Standard, he was shot a few days later! First action of Pres.Johnson? You got it, remove the Country from the Gold Standard and place it once again into the welcoming, greedy arms of the Fed Reserve!
-11 # Wink 2011-10-06 20:41
Sorry, Dick- you couldn't be more mistaken. Its open history-- but don't take my word for it-- check it out yourself. Apology accepted.
+8 # Dick Huopana 2011-10-07 10:44
Defense spending for F/Y 1981, Reagan's first year as president,was $194 billion. For F/Y 2011 just ended, defense spending is estimated at $965 billion. Yet you insist the trend for defense spending has been decreasing during those 30 years.
The source for my numbers is

What are your numbers and source?
+3 # Ken Hall 2011-10-08 14:58
I think you won the debate, Dick. I haven't seen any factual information coming from Wink, and I don't think you have to apologize for presenting facts and being correct.
+14 # shf 2011-10-06 21:06
To be as blunt as possible, those who continue to believe that social security is a failure are sheer dupes and ignoramuses. Do the math, you damn fools. It is one of the most successful programs ever instituted by our government. You should be damn glad we have it or else unthinkable numbers would be living on the streets.
+8 # kyzipster 2011-10-06 22:39
I thought the crash of 2007 was the apocalyptic event that would put us on a different course. $14 trillion in personal wealth lost. Households worth $1 million or more lost 40% on average I read somewhere. Had the government not bailed out the perpetrators as the teabaggers seem to want, it would have been apocalyptic. Difficult to say if that would have been for the best.

Obama never gave me much hope beyond thinking that he might be as effective as Clinton but I believed that the crash was proof positive that the last 30 years has been a miserable failure and that voters would demand a different direction. It didn't happen, Republicans continue to grow stronger, deflecting all blame on the Democrats while continuing to campaign on more tax cuts and more deregulation to fix all of our problems. Not that the Democrats are up to the task, after 30 years of the conservative era they're basically Republican-ligh t with a few exceptions. The center is long gone.

We will probably continue to see elections that swing back and forth between the parties as anger, fear and frustration continues to build amongst voters.
+9 # Bill Clements 2011-10-07 10:29
It's maddening, isn't it? This crazed crop of GOP lawmakers hellbent on calling for deep cut deficit reductions while simultaneously signaling their intent to vote down Obama's jobs bill. Clearly their plan has nothing to do with getting the economy moving again; on the contrary, you would have to be stupid not to see their sole strategy is designed to defeat Obama in the polls. Forget the millions of struggling Americans who are on the edge of a cliff or already in free fall. And yet, paradoxically (and perversely) their strategy is actually getting a hearty vote of confidence from their base?

I find it supremely ironic, by the way, that some on the right are smearing those protesting down on Wall Street as "anti-capitalis ts."

Gee, if by anti-capitalist they mean those who have a problem with the unfair distribution of wealth and power, excessive greed, repression of workers and trade unions, unemployment, economic instability, a government resembling not so much a democracy as a corporate oligarchy, etc. then please, count me in as an anti-capitalist , too and I'll be proud to wear it as a badge of honor!!
-11 # Wink 2011-10-07 15:20
My source? How about 25 years as a commissioned officer in the USAF, to include 6 as a theater/ global level war planner in Europe. Add to that a Masters in Int'l Relations (majoring in the Middle East) membership in an international world affairs council and more. At 67, I have witnessed tremendous changes in military planning and strategy development, to include a significant 20 year "peace time dividend" cost-saving draw-down of our strategic and tactical capabilities- both in troops and hardware-to be able to respond to even small scale conventional threats.

I spent those years defending your right to ridicule my kind of thinking. There are right now many others who give their lives daily to demand similar rights in their own countries, e.g., the mass slaughter taking place in Syria as just one example. Then consider our extremely limited capability to provide assistance and support for same. And our European allies are even worse off, as they spent much of their very limited war reserve in the recent Libya air suport campaign, and now look to us for support. Today's US military is barely a skeleton of its former self. You had best hope that there will not be a large scale need to use it; recall also Santayana's warning, that those who fail to learn the lessons of history are condemned to repeat them. I reiterate- freedom isn't free.
+5 # Dick Huopana 2011-10-07 20:20
So, how much higher do you think our government should be budgeting for defense and would you support increasing taxes to pay for the increased spending?
I note that you have said more than once that "freedom isn't free."

Also. thank you for militarily defending my right to challenge (not ridicule) your comment postings.

FYI, I've also served our country but only as an infantry platoon sergeant with the 101st Airborne Division. I'm 83 years old and also experienced the Great Depression.
+10 # Ken Hall 2011-10-08 10:35
Wink: Here's a quote from another member of the armed force. While he served decades before you did, the situation hasn't changed. "The flag follows the dollar and the soldiers follow the flag.... I spent most of my time being a high-class muscle-man for Big Business, for Wall Street and for the Bankers. In short, I was a racketeer, a gangster for capitalism.... I helped make Mexico, especially Tampico, safe for American oil interests in 1914. I helped make Haiti and Cuba a decent place for the National City Bank boys to collect revenues in. I helped in the raping of half a dozen Central American republics for the benefits of Wall Street. I helped purify Nicaragua for the international banking house of Brown Brothers in 1909-1912. I brought light to the Dominican Republic for American sugar interests in 1916. In China I helped to see to it that Standard Oil went its way unmolested."
General Smedley Butler, one of four war heroes to twice wear the Congressional Medal of Honor, revealed the real reason for American wars. On August 21, 1931 General Butler gave a speech at an American Legion convention in Connecticut and exposed the evil of Corporatecraft holding a corruptive and greedy spell over our constitutional Republic:
+3 # irvingwood 2011-10-09 20:53
It is the existence of a standing army that gets countries into trouble. It is too tempting for a state to apply any weaponry beyond that required for defense at the border to foreign interventions, where they have no business. One day hopefully nobody will be able to AFFORD to fight beyond their borders. When we are left with purely defensive war we'll have a quieter world and one closer to the peace all but the warrior class yearn for. This is happening to the UK today.
0 # madams12 2011-10-07 15:21
This BLOOMBERG Headline: EX CEO DAVID STOCKMAN CHARGED WITH FRAUD!....(2007 ) which is why we've not heard from Brother Stockman for a few years....until the case was dropped ...but do read about his defrauding for nearly 2 Billion..(mere peanuts)? he dragged the case out for years.fighting the SEC no less...but this article will fill in some of the missing info:http://www apps/news?pid=n ewsarchive&sid= adfH6qwori34&re fer=us
+5 # pernsey 2011-10-08 08:11
Our whole government is a joke. So much needs to the lobbyist system. They (big corporations) control d if you think they dont your deluding yourself. RAY-GUN and the GOP have ruined this country, the media, and any chance for our kids to have a decent future. I wont be voting republican anytime soon. They can squawk, spin, and spread their propaganda and some sheeple will repeat FOX news blather and idiocy...thats what they depend on. So much needs to change, where to begin? No matter how much the GOP demonizes the dems, they are better then those class dividing blood suckers. Im really angry at how they ruined our country, and the GOP has poor people advocating for the rich peoples all makes me sick!!!
+3 # pernsey 2011-10-08 08:12
Oh yeah not to mention the 2 idiot wars Bush got us into...that man was the pits!!
0 # Wink 2011-10-09 16:07
For Ken and Dick,
Granted there have been abuses by the government in applying military force for the wrong reasons. But that in no way justifies gutting the nation's defense capabiity. Historically we have learned this lesson the hard way. The depression of the 30s and the nation's isolationist policies caught us poorly prepared, and it was only FDR's forward thinking(seeing what was happening in Europe and the Pacific) that we were able to gear up our industry for wear. Even so, we suffered massive losses for the three-plus years it took to prepare. Given modern day weaponry, we no longer have the luxury of time to re-arm. Drawdown from WWII left us short of needed forces and capability in 1950 to respond to the Korea crisis, which cost us dearly and unnecessarily in GI lives lost. The world is a volatile place and ins not without risk. Moreover there are many who despise the US simply because we exist. Don't expect the UN to come to our aid, should we once again be threatened. How much does that cost? How much is your nation- your freedom- worth to you? Eisenhower's warning about the military-indust rial complex is certainly appropriate, but that in no way negates the need for a credible defensive deterrent capability, which as a 5 star Supreme Allied Commander in WWII Europe, he most certainly understood, as well.
+6 # Ken Hall 2011-10-09 18:55
Perhaps you misunderstood Gen. Butler, Wink. The US military is not a defense agency, if we actually had been spending all that money on defense, 911 might not have happened. The US military is the strong arm of US corporate interests. I don't thank the US military for defending my freedoms because that it not the job assignment, the military's role is to make sure our vassal states are kept in line and their riches flow into the corporate coffers. Read Chalmers Johnson's "Blowback" for instance. He lays it out quite clearly, and his analysis is entirely consistent with what I know of the world and the US place in it. Far from bringing democracy to other nations, the US has a long history of supporting dictators and tyranny, as long as it profits the few at the top. The Iraq war was engaged to create a business opportunity for US oil companies. The US does not need to spend on the military as much as all other countries combined in order to have a "credible defense". We could use that money for schools, infrastructure, healthcare, in short for peaceful purposes.
-7 # Wink 2011-10-09 19:43
Und ohne unsere Zweiten Weltkrieg US Wehrmacht und Luftwaffe, vielleicht werden wir Heute anstatt Deutsch sprechen! (And without our WWII US Army and Air Force, we might today be speaking German instead!) US military cemetaries are full of guys who paid the ultimate price for you to possess and express your views and opinions- however wrong-headed. Certainly there has been much abuse as you indicate, but that in no way justifies the drawdown of the past 20-plus years, and which will continue. Which reminds me, might just want to brush up on your Manderin....
+3 # Ken Hall 2011-10-09 20:51
You might want to brush up on your spelling.
0 # Wink 2011-10-10 16:21
Mandarin M-a-n-d-a-r-i-n . Where would we be without our Funk & Wagnalls? What a find!
+3 # Ken Hall 2011-10-10 20:51
Yeah, you should also check cemetaries (sic). If you don't use the language correctly, why would others take you seriously? I find your arguments to be in the same league as your spelling.
-2 # Wink 2011-10-10 21:39
Well, I guess I stand corrected, at that. I am humbled by your genius, omniscient one. But you're still wrong-headed on the the nation's military and defense, and my spelling can't correct that-- for that matter, neither can Funk & Wagnalls.
0 # kelly 2011-11-07 13:59
Well, if we spent a little more on Education and just a little less on the military(notice I did NOT say defense) perhaps your spelling would not be so lacking. But, Mr. Wink, it is not merely your inability to correctly spell that I am worried about. I work with many people, young and old, and it always amazes me that when my boss wants anything alphabetized she comes to me. The problem is that schools these days are so bad that many of the kids have no ability to string a coherent sentence together let alone spell words. Without education, the American dream will wither one the vine, protection or no.
+1 # kelly 2011-11-07 14:13
Perhaps the dictionary could not have helped...but less spending on the military(not defense as you claim) and a little more on education would have. I work with many people and it amazes me how my boss always comes to me whenever she wants something alphabetized. These people know nothing of correct spelling or even about putting a sentence together. Most don't know the difference between to and too and just try to have them figure out the proper time to use it's and its. However, my point is that with a little less emphasis on the military and a tad more on education, questions of our "native" language might not arrive. I get a kick out of people who claim we should all "talk English" a most grammically incorrect way of putting it for a native speaker. But I suppose we can be allowed indiscretions if we don't use accents(German ones, eh Mr. Wink?)

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