This debt explosion has resulted not from big spending by the Democrats, but instead the Republican Party’s embrace, about three decades ago, of the insidious doctrine that deficits don’t matter if they result from tax cuts.
In 1981, traditional Republicans supported tax cuts, 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.
Ahh, yes... three decades ago....
THE underlying problem of the deficits first surfaced, to Stockman's embarrassment, in the Senate Budget Committee in mid-April, when committee Republicans choked on the three-year projections supplied by the nonpartisan Congressional Budget Office. Three Republican senators refused to vote for a long-term budget measure that predicted continuing deficits of $60 billion, instead of a balanced budget by 1984.
Stockman thought he had taken care of embarrassing questions about future deficits with a device he referred to as the "magic asterisk." (Senator Howard Baker had dubbed it that in strategy sessions, Stockman said.) The "magic asterisk" would blithely denote all of the future deficit problems that were to be taken care of with additional budget reductions, to be announced by the President at a later date. Thus, everyone could finesse the hard questions, for now.
"Hastily prepared"?! To be fair, Stockman himself was an anti-government ideologue rather than a supply-side true believer, and the Reagan administration did change course and the tax cuts were partially reversed. But, nonetheless, three decades ago he entered into an alliance of convenience with the supply-siders and one can trace a pretty direct line between the policies he helped usher in and the nonsense he now laments. Of course, a return now to pre-Reagan Republican balanced budget dogma, as Stockman is calling for today, would be another kind of pernicious stupidity....
The quote above is from William Greider's famous 1981 Atlantic article "The Education of David Stockman." Stockman later wrote a book about his experience in the Reagan White House, which was reviewed by Michael Kinsley for the Times.
Update (8/6): Bruce Bartlett, who as a staffer for Congressman Jack Kemp also played a supporting role in the 1981 tax cuts, considers Stockman's "eclectic ideological journey."