In the latest edition of The Wall Street Journal’s „The Big Interview,” David Stockman, Ronald Reagan’s first Budget Director, doesn’t pull any punches when he discusses the damage that has been — and is still being — done to our nation’s finances:
WSJ: [You are] not very sanguine about the economic situation.
Stockman: Well, I think if you look at the fundamentals it’s very hard not to be. We went through a thirty or forty year binge where it seems like every time there was a hiccup in the economy we had another stimulus program, we had some more monetary easing —
WSJ: There was a balanced budget —
Stockman: There was one or two years, OK, but the theory, if you go back to the 1960s or 70s, was we would have surpluses or balances [during] most of the time in the good years, and then when we needed to stimulate the economy in a downturn we would do that, but we would balance our affairs over time. We didn’t do that. We just added and added and added to the debt. Today we…have $9 trillion worth of federal debt,…but we also have two or three years of absolute gridlock in front of us if the Republicans rout the Congress this fall — which I think they will. Nothing will be done until 2013, which means that, really, we’re not going to get a grip on the federal deficit until Fiscal Year 2014. There’s three or four trillion more of debt that’s baked in the cake. You add local and state debt, which is public debt, [and] we have $16 trillion of debt baked in the cake — 100% of GDP. We’re in a Greek-scale factual circumstance.
Scary stuff from Mr. Stockman. Here is the complete video: