The Budget: Guns Up, People Down

...John Wayne and Bela Lugo-si, in their respectively macho and fiend-ish movie incarnations, would have undoubtedly applauded the "Guns Up, People Down" Reagan budget for fiscal 1983...

...Curiously, ideologi-cal extremes meet, one to restore jobs quickly, the other to draw an ounce of flesh Rent vouchers, in a page taken from Milton Friedman, would replace public housing as the vehicle for providing cheap living space...

...Many of us see most of the period, until about 1967 or so, as an era of spectacular growth to affluence—until the blight of the Republican Nixon epoch, nudged on by Ford and propelled by Carter into the stagflation ordeal Rhetoric comes easy, and facts seem out of style in the Reagan White House Ruefully, the Budget Message accurately reflects a President eager to play Russian roulette in a nuclear age foolishly itching to prove we can lick Nicaragua and Cuba as well, concerned to make sure the banks don't lose a penny on their loans to Poland, and adamantly committed to tax welfare for his rich cohorts I neglect the packaging of States' Rights, disguised as "American Federalism," perhaps to make sure that nobody confuses it with Soviet Federalism Some small parts of it can make sense Overall it is regressive, holding out less aid for the needy in order to preserve the great wealth of the President' s personal constituency And escapism on national problems is compounded by the President displaying a touching faith in corruptible, underpaid local bureaucracies The Reagan yearning for pony express politics in the computerized nuclear age is bound to muddle the dialogue over the next tew years Quips will tool some of the people some of the time, but in the end good ideas are unlik elv to be denied by the demagogic uses of thcTV screen Faith in the good sense of the American people has seldom been misplaced, despite frequent lapses in political judgment SIDENY WEINTRAUB professor of eco-nomics at the University of Pennsylva-nia and a regular contributor,is teach-ing this semester an Williams College...

...Presidential pronouncements notwithstanding, there is certain to be "tampering" with the sacrosanct Reagan-Stockman-Regan numbers They will bear faint resemblance to the final facts, because the sums just don't add up They are based on optimistic forecasts for inflation, for production and job growth, for interest rate declines One statement m the purported "serious" Budget Message is enough to discredit them Referring to the present recession, the President claimed "this factor alone accounts for nearly all of the difference between the $45 billion 1982 deficit we projected last year and our current estimate of $98 6 billion " So after going astray by 120 per cent in last year's forecast, Reagan wants us to take the new "document" as gospel, and to serve as starch for his fund-raising electioneering tour The Great Communicator has no conception of his abject confession of blundering The following table contrasts current competing estimates of the Congressional Budget Office with the Administration's Office of Management and Budget Discrepancies render comment superfluous tions have tolerated deficits, and it would be hypocritical of liberals to contend that thesky is falling because of the renegade Reagan's numbness on numbers Yet there is a difference that can be profound, even if a full analysis must be deferred In most of the Democratic instances, the deficit was run in concert with a stimulative and expansionary monetary policy to increase jobs and production, and at very low interest rates compared to today's legalized To be sure, the CBO estimates are based on existing statutes, the Administration sums embed the wishful thinking that Congress will rubber stamp proposals Nonetheless, the mere sight of the Reagan deficit string supports a Deficit-Debt Ronnie image In one of his TV spectaculars, the President gains much mileage by scaring us with a tale on the dizzy heights reached by a stack of $1 bills depicting the $1 trillion dollar debt He could have made the pile more than 100 times higher by using pennies, or brought the heap closer to earth by borrowing $1,000 or $10,000 bills from his rich cronies But no matter The point is that "this President," as the new pomping has it, will go down as doing more to enlarge the national debt than any President in our history FDR was a piker by Deficit-Ronnie standards Between 1933-40 the New Deal spender added about $20 billion to the national debt Including World War II, the ascent was about $235 billion Reagan will dash ahead by $350 billion on the Regan-Stockman estimates, and by about $650 billion according to the CBO figures Either way, Reagan will stand out luminously in our debt annals—if he is given his head Obviously Democratic administraloan-sharking Moreover, in the 1930s and the 1960s the inflation ingredient was absent, and during the War years wage and price controls prevailed The Reagan deficits, in contrast, collide with a monetary policy designed to prevent strong economic recovery The Federal Reserve's keeping interest rates near historic highs will block jobs and output, and maintain the housing, steel and auto industries in their current state of shambles—or at best allow a modest uptick The PRESIDENT speaks of the great gains to be reaped from tax indexing-which comes in 1985 Not only is that a long way to Tipperary, but Israel and Canada hardly confirm the success of the tax-indexing pipe-dreams Reagan further declares that "the inflation spiral has been broken " Of course, on the backs of the jobless He could go all the way by creating a Great Depression Herbert Hoover was expert in bringing down prices, too Republicans have a knack tor enduring pain inflicted on plain folks On inflation, Reagan has clambered to the other end of the stagflation teeter-totter, never-theless, prices are still rising too last To justify his approach, Reagan chatters away about his "mandate," meaning his squeaky 51 per cent vote margin over the combined Carter-Anderson 49 per cent Skeptics will not see this as a blank check Nor will they be deluded by his harping on the fact that "it is impossible in a short period of time to correct the mistakes of decades " Since the close of World War II, beginning with Truman in 1948, we have had eight Presidential terms Four of them were Democratic, four Republican Is Reagan denouncing Eisenhower and Nixon-Ford...

...Who, in the entire Stockman office, can predict a single stock on Wall Street that will rise, say, 3 points this afternoon...

...The interest statistic is understated, based as it is on the "assumption" that short-term Treasury bills, will yield about 10 5 per cent despite the present 14.5 per cent range...

...The noxious pattern has already appalled conser-vative Republicans like Senator Alfonse D'Amato of New York and Governor Thomas Kean of New Jersey...

...A DEFICIT THRILLER The Budget: Guns Up, People Down BY SIDNEY WEINTRAUB THUMBING his nose at his own long and umnformed babbling about the economy, Ronald Reagan is destined as President to become king of the deficit-makers and un-disputed master of the national debt mountain...

...Econometricians thrive on the nonsense-and charge while they change their predictions almost daily...

...In short, for poor people the Reagan communicants buy at a whole-sale, for the military, the purchase are at monopoly retail prices...

...To accompany these joyous tidings for the underclass, the Stockman office has provided tables and charts on GNP, consumer prices and budget sums way out to 1987...

...Between military and interest outlays, given the incredible Reagan interest rate mismanagement, 42 per cent of the budget sums is absorbed, with the military taking 29 and interest charges 13 per cent...

...Yet this garbage gets "debated...

...That may be a good year for California wine but the projections are a hoax, wholly wasteful of taxpayer money...

...Forked-tongue Office of Management and Budget Director David Stockman, who will do most anything as a dedicated messenger boy to escape the woodshed, had the effrontery to say, before a TV "expert" news panel, that "there was not much give in the figures,' prior to confessing after a Congressional hearing that "maybe there can be a better spend-tax mix " Anything goes, depending on the time of day Treasury Secretary Donald T Regan, despite a lifetime of deficit-denunciation, has lamely mouthed mealy platitudes on the glories of trickle-down tax cuts?ultimately The main features of the budget were spread in the press two davs before their transmittal to Congress, no accident in an Administration more adept at secre-tiveness than even the Nivon White House...

...Apparently the PR hype aimed at getting the newspapers to report the verbal mush and ignore the Reagan actions This is the new perversion ot the unsavor John Mitchell dictum What the press has missed are the absurd ideological fantasies interred within the so-called Budget Message Truth-shading abounds, the Presidential ghosts have an extraordinary ap-titude for overlooking facts, with the technical advisers craven enough to inject outrageous rhetoric on issues where reasonable judgments can differ The clear flip-flop on deficits was manifestly too big to hide, intellectually distressing, however, are the self-serving assertions on the merits of fiscal shortfalls under Republican auspices and the dements in Democrat hands Those passages are not merely partisan by-play, they are malodorously deceptive The expenditure centerpiece tots up to $757.6 billion, 4 4 per cent higher than 1982 but shy of the mythicaly inspired 6 per cent inflation estimate The latter "assumption" can be realized only by conscripting an oversized unemployment army, it will not come to pass it the promised recover script materializes Revenues weigh in at $666.1 billion, a very exact number likely to have little relation to the actual tax-take That will depend upon the state of the economy in 1983, and the foreshadowed course of interest rates indicates the recovery will be anemic, not robust, compelling higher unemployment and welfare outlays plus slenderized tax collections The discrepancy between the expenditure and revenue figures translates into the $91.5 billion deficit that has traumatized the conservative Reagan Regulars Of course, the President extols his deficits as an act of statecraft, strutting out on the hustings to challenge others "to put up or shut up" Obvious alternatives that occur instantly are to defer some tax cuts for his cronies, alter some of the queer corporate investment-credit tax rules, and install an Incomes Policy to ease the monetary stand-off that is taking us down disaster road and, among other things, ensuring a massive future housing shortage Only Hollywood speech writers could inject so sterile a platform ploy into presumably substantive Presidential remarks Our never wasteful, never extravagant military--tell that to anyone who has served in our Armed Forces—is slated to grab $216 billion, an increase of 18 per cent...

...Or is this just Hollywood speaking, without concern for the facts...

...One has to wonder how conservatives can call this theology a realistic political philos-ophy HOUSING and Urban Develop-ing in order to raise occupant rents ment and the Labor Depart- by about 10 per cent CETA programs ment would be chopped by would be transformed into "block 10 and 17 per cent, respectively, appar- grants," and cut from $4 3 billion to ently our cities are already flourishing $2.2 billion In short, for poor people Food stamps, which always make Rea-gan choleric, would drop by 10 per cent, sale, for the military, the purchases are perhaps the President has found a new at monopoly retail prices The noxious cheater in Chicago—or is it in Orange pattern has already appalled conser-County this time, among his rich friends" Conservative Republicans like Senator Alf-onse Welfare payments down, to $5.4 billion D'Amato of New York and Governor from $78 Drawing on the experience Thomas Kean of New Jersey of his arduous work life as a sports an- To accompany these joyous tidings an-nouncer, movie actor and TV hawker, for the underclass, the Stockman office states would be required to exact work of leaf raking...

...It is safe to predict a brisk market in the funny money that a future Reagan will denounce Food stamps would henceforth count as in-come for people in existing public hous-ing in order to raise occupant rents by about 10 per cent CETA programs would be transformed into "block grant," and cut from $4.3 billion to $2.2 billion...

...Don't wager more than a penny on this calculation, for this Administration's predictions have been as shrewd as those of the man who continually bets that temperatures in Buffalo will be lower in July than in January Other budget allotments follow the Reagan non-compassion pattern Education, down nearly 15 per cent (on top of the inflation erosion), mass transportation lopped by 38 per cent, highway funds out 21 per cent, Amtrak 30 per cent Reagan never rides trains and his limos avoid potholes This is a magnificent example of a "think-small" aldermanic approach to a great coun-try's potential Reagan's New Old Fed-eralism involves a vision of a public sec-tor about the size of a Mom and Pop store Up with bigger Duponts, Mobils, from IBMs, United States Steels, and other sprawling corporate giants to safe-guard the public interest...