YOU COULD LOOK IT UP: With Democrats and Republicans wrangling over who has the best formula for balancing the budget, what has been overlooked, some scholars complain, is whether wiping out the deficit will really help the economy. Over the nation's history, every sustained drive to balance the budget and cut the deficit has had as its immediate sequel a major depression, according to Frederick Thayer, professor emeritus of the University of Pittsburgh's Graduate School of Public and International Affairs. The pattern can be traced through five 19th-Century depressions and reached its climax with the big bust of 1929. Since 1930, Thayer notes, there have been no prolonged periods of deficit reduction. And he points out that while the country has endured recessions since then, it has not suffered a reversal on the scale of the 19th- and 20th-Century depressions.
PRESTO CHANGO: If you are leader of the U.S. Senate, you probably need all the help you can get: divine intervention, magical powers, that sort of thing. Perhaps that's why Majority Leader Bob Dole (R-Kan.), working furiously last week to stitch together welfare reform legislation that would close the split between GOP moderates and conservatives, apparently engaged in some sleight of hand. Dole was trying to appease moderates who opposed a provision that would allow states to stop spending their own money on cash assistance for poor families. He introduced a "maintenance of effort" provision that appeared to require states to continue spending on the largest program for the poor, Aid to Families With Dependent Children, at a level equivalent to 75% of current expenditures. The actual language, released this week, says states would indeed be required to continue spending that money. But it could go to any program that benefits people earning less than 240% of the federal poverty level, or $37,500 for a family of four. Under that language, fumed moderates, states could count money they devote to public education, Medicaid and other programs unrelated to the cash assistance.