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The author discusses the influence Marx had on his studies of the Soviet economy & how this led to his subsequent publication with Matthew A. Stephenson, Marx's Theory of Exchange, Alienation, and Crisis (1973). 7 References.

Argues that supply-side economics provides a better explanation for US current & capital accounts during the Reagan era than the arguments that excessive Keynesian expansion caused the budget & trade deficits. Supply-side economics presented a fundamental shift from Keynesian demand management. The 1981 business tax cut & the following reductions in personal income tax rates increased the return on investment, &, therefore, encouraged domestic investment, allowing the US to finance its own deficit. Inflation declined quickly, creating the Reagan deficit, & the halt in US capital outflow resulted in a trade deficit, making the Keynesian arguments of "twin deficits" a hoax. 4 References. L. A. Hoffman

It is noted that Western economists habitually overestimated the growth of the Soviet economy. Despite Mikhail Gorbachev's 1988 statement that the economy had not grown in 20 years, the Central Intelligence Agency & the Defense Intelligence Agency reported two months later that the Soviet economy had shown annual growth rates of 2% to 5% between 1966 & 1985. This misconception is attributed to the fact that up until the collapse of the Soviet Union in 1989, it was considered fashionable among economists to tout the growth potential of central economic planning. The reasoning behind erroneous assumptions such as this is discussed, focusing on the Soviet planners' use of gross output as the primary success indicator for manufacturing enterprises. Factory managers would focus on the particular measure (eg, weight, quantity, or surface area) chosen by planners, resulting in a high gross output that related very poorly to the needs of users. It was not uncommon under this system for inputs to be combined in such a way that the outputs were worth less than the inputs. 28 References. J. Paul