David Stockman Tells the Truth; Propagandists Up in Arms

Former Reagan budget director David Stockman had a piece in the New York Times last weekend that I insist you read; it may whet your appetite for his indispensable book. I’m told both Paul Krugman and David Frum are outraged, which is all the more reason for you to click and read it. My only criticisms are these:

(1) To heck with higher taxes to “pay the nation’s bills.”

(2) Is returning the Fed to its “original mission” a stable equilibrium? Why didn’t it stay so confined the first time? Is its original mission as a government-privileged monopolist providing “liquidity” during hard times compatible with the free market? Is there any reason to think it wouldn’t just develop into the same Fed we have now, just as it did the first time? Why not just end the Fed and solve the problem?

(3) Stockman says the government needs to retreat from imperial hubris, social insurance, etc., and get back to focusing on a basic, means-tested safety net. Again, is that a stable equilibrium? Is there a country in the world that has such a limited safety net? Is there not a natural tendency for such a thing to expand into what we have now?

Originally posted on TomWoods.com.