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Is supply-side myth behind budgetary crack-up?

"We are hurtling irreversibly toward a budgetary crack-up that will generate the mother of all crises in global bond and currency markets," wrote David Stockman, who was a former budget director for President Reagan. Stockman places much of the blame on the supply-side movement that he led under Reagan, which claimed that "deficits disappear on their own if doused with enough economic growth from tax cuts and deregulation." The consequence of the GOP abandoning its fiscal responsibility, Stockman wrote, was that "the nation's finances have succumbed to the raw, parochial imperatives of organized lobbies and hometown industry. These primal political forces now heap fiscal largesse on clunker cars, random homebuyers, farm-belt ethanol plants and Wall Street bankers with bipartisan equanimity."

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