YOU ARE HERE: LAT HomeCollections

'Economic Witchcraft'

January 26, 1986

After reading Los Angeles County Supervisor Michael Antonovich's response (Letters, Jan. 19) to your editorial (Jan. 9), "Economic Witchcraft," I could not help but feel fortunate that he is not my elected representative. His argument for placing the blame for the huge federal deficits solely on an irresponsible Congress, and his proposed solution for the same, display a frightening lack of basic mathematics and common sense that is desperately needed by the people running our government.

First of all, the "irresponsible spending by Congress" was approved by the President when he signed the legislation to authorize this spending. If the President believed the budget to be irresponsible, then he let the American people down when he did not veto the necessary bills.

And as everyone who wants to know knows, Congress did reduce spending in virtually all major areas of the budget that it had control over (it could not reduce interest payments on the federal debt), except for military expenditures, which it increased drastically at the behest of the President. Congress' biggest failure was to not control the increase in defense appropriations, and this failure was encouraged by the President.

Secondly, and sadly, in that a person in the position that Antonovich holds can not distinguish between planning and wishing, simple mathematical analysis of the 25% tax cuts of 1981 would reveal that they could not possibly stimulate enough economic growth to create new tax revenues that would offset the tax cuts.

Yes, tax revenues increased; they should increase if the government pours an extra $270 billion into the economy. But for the tax cut to be a success, the money reinvested in the economy (about 25% of tax revenues, or about 5% of the tax base) would have to cause a growth in the economy equal to 33% of the tax base. Without wild inflation (from which we have been spared, at the cost of continued high unemployment), this tax cut-investment would have to increase at a compounded rate of 160% to give us the same tax revenues by the end of the (promised) four years. Admittedly, this analysis is simple, but so was the "supply-side" plan.

Lastly, Antonovich's recommendations for dealing with the deficit are as useless as most reactionary solutions. While the Grace Commission made several valuable recommendations, in general, the government can not be run like a conglomerate. A well-run conglomerate (I do not know of any) is not run by committee (excepting the Japanese), and is headed by a person who takes ultimate responsibility for the success or failure of the organization. Normally, this would be the president, but the President of our country offers only excuses and finger-pointing. A well-run conglomerate does not give open-ended, cost-plus contracts or pay for equipment that doesn't work. And it fires unproductive or incompetent workers.

The idea of giving the President a line-item veto is a dangerous one, for it would allow the President to implement only the parts of a bill that he or she liked. This sort of eliminates the need for a Senate or House of Representatives, which play an important part in our government. I doubt that Antonovich would support this measure if Jesse Jackson were President.

Finally, a balanced-budget amendment would be unnecessary if we had a President who stuck to his promise of balancing the budget in four years (I would have settled for five).


Santa Barbara

Los Angeles Times Articles