I dreamed that I could do the job that others hadn’t done. I dreamed that I was uncorrupt and fair to everyone. I dreamed I wasn’t gross or base, a criminal on the take. And most of all I dreamed I forgot the day John Kennedy died. So go the words of Lou Reed in his 1982 song about the assassination of President Kennedy.
This week, Robert Samuelson in his Washington Post editorial took an assinationational pen to John Kennedy, proclaiming that the 1960-1963 administration was to blame for our current fiscal problems. While I generally like Mr. Samuelson’s take on the economy (note that he is not an economist which is probably why he writes so well about economic issues), this particular column was completely out of whack. In it Mr. Samuelson suggests that a relatively small cut in federal taxes proposed by President Kennedy and enacted shortly after he was assassinated, has led to a period of fiscal ineptitude unheard of in American history. He suggests that since this modest tax cut was enacted, the Federal government has been in deficit in all by 5 years, and of those, 4 were an anomaly.
I agree that the proto-Keynesian idea of stimulating the economy through deficit spending is at best simple minded, and I also agree that the Federal government has been unable or unwilling to live within its means. However, Mr. Samuelson’s suggestion that a modest tax cut undertaken during a fiscally stable period has led to annual $1 trillion dollar deficits is incorrect and misleading. In fact, the federal deficit was growing at a rate of about 1 percent on average during the 1950s and about 1.7 percent during the period from 1960 through 1967. It was not until 1968, a year when the VietNam War was in full swing, and the Great Society entitlement programs began to come into force that deficit spending began to take off. Between 1968 and 1980 deficits grew by 8 percent per year.
It is nice to blame the war for the deficits, and LBJ, GB2 and BHO are very similar in that they all took the country to war without finding a way to pay for it, but the real problem with both Federal spending and the accumulating deficits is clearly entitlement spending. This is not to say that all government transfer programs are inherently bad. There are legitimate reasons for many of them; however, pretending that the country can put a chicken in everybody’s pot and simply borrow and print money to do this is disingenuous. JFK was buried in Arlington long before the deficit exploded – it was the politicians who followed, both Democrats and Republicans, who should be blamed for the current mess.