Suchergebnisse

This is the text of a brief speech given by Babbitt at a Democratic Party function in November 1987. The distilled contents are for the most part dealing with economic policy in the United States.

An attempt to reconcile the recent explosion in the fiscal deficit of the US with the well known support of the US public for fiscal conservatism. Gallup polls dating back over a period of four decades show that solid majorities have consistently opposed tax reductions that might produce an unbalanced budget. Recently, the public has also shown opposition to increases in taxes to close the fiscal gap, which might appear to imply a new acquiescence to the deficit. However, polls also show that this opposition has persisted for a long time & is not logically inconsistent with rejecting tax cuts resulting in deficits. It is also demonstrated that, although the budget process in a democratic society is said to be biased toward deficit because the cost of higher taxes is immediate while the cost of deficit is delayed, the fiscal history of the US over the last 100 years reveals no systematic bias toward deficits, at least until recent years. The major explanation that emerges is that the Reagan administration succeeded in misleading the public (& perhaps even itself) into believing that the tax cut would not result in deficits, thanks to "supply" & "Laffer curve" effects. Once in place, the deficit was hard to undo because of the inconsistent priorities of the main actors: the President, Congress, & the public. 1 Figure, 1 Appendix, 23 References. Modified AA

For Latin American governments, mediating between their national societies and the international economy, the contemporary debt issue poses some excruciating dilemmas. On the one side, these governments are under intense pressure to arrive at satisfactory formulas for settling their debts–satisfactory, that is, to the banks and creditor agencies that control access to international financial markets. Loss of such access would threaten vital capital and trade flows, and for this reason virtually every Latin American government has so far placed a high priority on meeting its external obligations. But governmental elites, if they are to remain in power, must also answer to (or repress) their own populations. And the price to be paid for external help with "liquidity problems" has typically involved politically dangerous stabilization measures (devaluations, wage and credit restrictions, and fiscal deficit reductions)–measures that often arouse the strong opposition of major social forces.

THE BUSINESS COMMUNITY, MANY CONSERVATIVES, AND EVEN ONE REPUBLICAN PRESIDENTIAL CANDIDATE HAVE FALLEN FOR THE LIBERAL DEMOCRATIC LINE THAT TAX CUTS ARE RESPONSIBLE FOR THE BUDGET DEFICIT, WHICH IN TURN IS RESPONSIBLE FOR THE TRADE DEFICIT AND AN OVERRELIANCE ON FOREIGN CAPITAL. THE RESULTING OVEREMPHASIS ON REDUCING THE BUDGET DEFICIT, IF NECESSARY BY TAX INCREASES, IS DISTRACTING WORLD POLICYMAKERS FROM THE REAL PROBLEMS THAT THREATEN ECONOMIC STABILITY-PRINCIPALLY MONETARY POLICY AS WELL AS A U.S. TAX SYSTEM THAT CONTINUES TO DISCOURAGE PRIVATE SAVING.

Argentina has made the headlines of international media not only for its successful return to democratic political rules in December 1983 but also for its renewed slump into economic crisis. The country is no longer able to meet the debt servicing requirements and to repay loans due this year while auspices for rescheduling and extending foreign debt are bleak. As a corollary tovexternal problems, there are high public sector deficits, inflation is accelerating at a galopping pace, and net private investment has turned negative. Up to now, the new democratic government has not lived up to expectations since it did not present a reform package designed to overcome the severe economic problems of the country. Rather, the government has relied on some ad-hoc emergency measures in an attempt to prevent the crisis from turning into catastrophy.

Abstract. A crisis is afflicting traditional liberal economists. The crisis policy devised by John Maynard (Lord) Keynes, which seemed to work well during World War II and in postwar reconstruction, met its nadir in 1975. Contrary to Keynesian theory, formalized in the Phillips Curve argument that inflation and mass unemployment are mutual trade offs, double digit inflation and record unemployment made further deficit spending an impossible policy. Some Keynesians, switched to a new ideology, "industrial policy", a form of piecemeal planning likely to eventuate in a new protectionism. Analogous to the supply side economics ideology, industrial policys' adoption by many leading Democrats could drive many Keynesian economists from the Democratic party.

The first session of the 99th Congress was a year of wrenching institutional and political realignment. Facing monstrous structural budget deficits in excess of $200 billion a year. Congress struggled to adjust its distributive urges to the unpleasant realities of a redistributive era. Unlike previous budget crises that were caused by economic events beyond Congress's control, the current problem was created by an unwillingness to raise sufficient revenues to pay for the nation's defense and social program commitments. Frustration, gridlock, and partisan warfare eventually ended in surrender to the Executive Branch: a balanced-budget act was adopted that could radically alter Congress's power of the purse.During the 99th Congress, many Democratic members also continued to realign their policy positions in accordance with contemporary economic and political forces. Democrats in Congress searched for an appealing formula that would ensure political survival and continued control of the House. But the strain of reconciling their traditional public philosophy with conservative trends left Democrats demoralized and in disarray.

The first session of the 99th Congress was a year of wrenching institutional and political realignment. Facing monstrous structural budget deficits in excess of $200 billion a year. Congress struggled to adjust its distributive urges to the unpleasant realities of a redistributive era. Unlike previous budget crises that were caused by economic events beyond Congress's control, the current problem was created by an unwillingness to raise sufficient revenues to pay for the nation's defense and social program commitments. Frustration, gridlock, and partisan warfare eventually ended in surrender to the Executive Branch: a balanced-budget act was adopted that could radically alter Congress's power of the purse.During the 99th Congress, many Democratic members also continued to realign their policy positions in accordance with contemporary economic and political forces. Democrats in Congress searched for an appealing formula that would ensure political survival and continued control of the House. But the strain of reconciling their traditional public philosophy with conservative trends left Democrats demoralized and in disarray.

The first session of the 99th Congress was a year of wrenching institutional and political realignment. Facing monstrous structural budget deficits in excess of $200 billion a year. Congress struggled to adjust its distributive urges to the unpleasant realities of a redistributive era. Unlike previous budget crises that were caused by economic events beyond Congress's control, the current problem was created by an unwillingness to raise sufficient revenues to pay for the nation's defense and social program commitments. Frustration, gridlock, and partisan warfare eventually ended in surrender to the Executive Branch: a balanced-budget act was adopted that could radically alter Congress's power of the purse.During the 99th Congress, many Democratic members also continued to realign their policy positions in accordance with contemporary economic and political forces. Democrats in Congress searched for an appealing formula that would ensure political survival and continued control of the House. But the strain of reconciling their traditional public philosophy with conservative trends left Democrats demoralized and in disarray.

In the second half of 1971 over 500 leaders were interviewed in 10 institutional sectors in the US. Opinions on a wide range of economic, foreign policy, & social issues were obtained from 456 of the R's: 43 industrial corporation presidents, 53 nonindustrial corporation presidents, 24 "centimillionaires," 41 national labor union presidents, 37 members of Congress, 49 appointive Administrative officials, 49 top federal civil servants, 39 political party officials, 44 voluntary association leaders (minority, liberal, & conservative groups), & 54 mass media professionals & executives. Data are also used from Charles Kadushin's AMERICAN INTELLECTUAL ELITE (Boston, Mass: Little Brown, 1974) sample. Attitude clusters are related to institutional sector, which was the most important variable determining attitudes. Economic issues divided the elites along class lines, with businessmen at one extreme & labor & minority group leaders at the other with respect to tax reform, income redistribution, & elimination of poverty. On these issues Republican politicians were close to business, while Democratic politicians were in the center with the mass media & civil servants. Majorities of all groups favored deficit spending in times of recession, some kind of action to help the poor, & the belief that a worker's child can get ahead, while rejecting socialist policies. Both political groups & the 'center' professionals (media, civil service) joined with labor against business (on environmental issues) or with business against labor (on compulsory arbitration, increased workers' role in management). Foreign policy found mass media leaders at the 'dove' extreme & Republican politicians & officials at the 'hawk' extreme, with labor, business, & Democratic politicians in the center. The Republican political apparatus appeared isolated from their normal business consitituency--foreshadowing subsequent moves toward detente--while the normal Democratic-labor coalition was split on foreign policy--foreshadowing the 1972 McGovern debacle. "Social issues" involving youth culture likewise cut across economic interests & split the normal liberal-labor coalition. 5 Tables, Appendix. Modified AA.

Three articles concerning the direction of leftist US politics & economic policies post-1986 are presented. In A Case for Economic Redistribution, Gus Tyler suggests a redistribution of income to stabilize the economy. President Reagan has momentarily avoided serious economic shortages through a loosening of the money supply & deficit spending; when these stimulants wear off, however, a serious recession is forecast. Future Democratic policies are encouraged to redistribute income in order to create employment, upgrade the minimum wage, & promote environmental protection measures. In If There Is a Recession -- And If Not, Michael Harrington suggests defense cuts, an abolition of tax expenditures that have "no, or a perverse, effect," & the adoption of the thirty-two hour work week to promote long term economic benefits. Such actions would "democratize, decentralize, & humanize the economy." In The End of Ideology? Dennis Wrong declares the landslide victory of the Republican administration in 1984 was predicted by a cyclic alteration in US political tendencies. By the 1990s, however, an "end of ideology" may occur that will undercut the political delineations of "liberal" & "conservative.". R. McCarthy

Over the last five years, military authoritarian regimes broke down consistently throughout Latin America. The return to democratic government has had less to do with the internal political situation in these countries than with the economic crises faced by the military regimes. The military regimes collapsed primarily because of the external debt crisis that emerged in the early 1980s. There were two characteristic patterns in the macroeconomic policy of the military authoritarian systems. According to one pattern, the regimes attempted to maintain growth rates through reflation, which led to chronic trade deficits that had to be covered through continuous reserve inflows. Alternatively, particularly in the Southern Cone, the regimes attempted disinflation through the heterodox strategy of underdevaluation of exchange rates. Although this slowed inflation, this was achieved only at the cost of serious balance of payments disequilibrium and a decrease in external competitiveness, which limited the ability to service foreign debt. The net result was that at the time of the global recession of the early 1980, the regimes were forced to apply restrictive policies that were associated with substantial output losses. The domestic recessions in turn largely destroyed the military's claims to political legitimacy.