The party is over

August 16, 1991

The folks who brought us Reaganomics are giving a new definition to the term chutzpah -- the Yiddish word for unmitigated effrontery -- as they celebrate the 10th anniversary this week of the economic policy which promised us lower taxes, higher military spending and balanced budgets all in one beautiful package.

Among those throwing a big birthday party was the Heritage Foundation, which was a sort of intellectual fountainhead of supply-side economics policies. Judging from news accounts of the bash, however, no one pointed out that the price of the tax cut was a tripling of the national debt, or the point that today 27 cents out of every dollar in revenue taken in by the U.S. government, excluding Social Security taxes, now goes for interest on debt. The comparable figure at the outset of the supply-side madness was less than 10 cents on the dollar of revenue. As far as we can tell that horrendous burden reaches as far into the future as the eye can see.

Moreover, of that 73 percent of revenue that's left over after the interest is paid, a huge chunk of it must go to pay for the bank bailouts that became necessary in the era of junk bonds and leveraged buyouts.

This is the true legacy of the Reagan Revolution. No one put it better than Sen. Daniel Patrick Moynihan: "We borrowed a trillion dollars and threw a party." Revise that. Make it two trillion.

Well, word may not have reached the Heritage Foundation, but folks, the party is over. A debt-ridden nation struggles, and not very successfully, to get out of recession. But let our friends who brought us Reaganomics enjoy themselves. We predict that by the time the 20th anniversary of Reaganomics is observed, Americans will hold them in about the same esteem that Eastern Europeans hold the crowd who brought them communism.

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