Word: deficits
(lookup in dictionary)
(lookup stats)
Dates: during 1980-1989
Sort By: most recent first
(reverse)
After all, with candidates given only a minute to sum up their positions on such complex issues as arms control, the budget deficit, or the Middle East, the debates make simplistic slogans like "no new taxes," abortion is murder," and "I won't touch Social Security," seem acceptable. No candidate who actually hopes to win will dare say that he will raise taxes to bring down the budget deficit, or purposely bring up any other issue of substance. Despite professing sympathy to the needs of all Americans, candidates often seem to adopt the condescending attitude that by speaking in vague...
...course, no one says it better than the master himself. From his 1981 Inaugural Address (in the days when $80 billion was a record federal deficit and the rest of the world still owed America money): "You and I as individuals can, by borrowing, live beyond our means, but for only a limited period of time. Why, then, should we think that collectively, as a nation, we're not bound by that same limitation...
...supply-side Pollyannas predicted that lower tax rates would induce huge increases in saving and investment, which would produce enormous growth, which would wipe out the deficits. They were wrong. Net private saving, which averaged 8.1% of GNP in the 1960s and 1970s, dropped to 5.8% in the 1980s. (It was 4.1% last year.) Investment in new plant and equipment averaged 3.3% of GNP in 1950-80 and 2.3% during the 1980s. Economic growth averaged 4.8% in the 1960s, 2.8% in the 1970s and 2.2% in the 1980s. And we know what happened to the deficit...
...Cassandras predicted that huge deficits during an economic recovery would inevitably lead to renewed inflation (if the Fed went along by increasing the money supply) or an interest-rate squeeze and a U-turn back into recession (if the Fed held fast). They also were wrong. They overlooked the new globalization of credit markets and the willingness of foreigners to step in and supply the dough. The Cassandras have been updating their scenarios throughout the 1980s: the overvalued dollar will destroy American industry; or, the undervalued dollar will hand American industry to foreigners; or, when the foreigners get tired...
...budget deficit and the trade deficit are really aspects of the problem of too much consumption and not enough saving. As Harvard professor Benjamin Friedman points out in his forthcoming book Day of Reckoning, the share of national income raised in federal taxes is exactly what it was in 1979, but the share returning to individuals in the form of transfer payments (Social Security and so on) has gone up. The Government borrows the difference, thus replacing national savings with consumption. The 1980s' consumption boom, Friedman notes, has been financed in three ways: by this shift in the Government budget...