David Stockman

David A. Stockman was the director of the Office of Management and Budget from 1981 to 1985, during Ronald Reagan's first term as president of the United States. Prior to this he was a congressional representative from Michigan's Fourth District.

A staunch advocate of supply-side economics (which was really the trickle down theory with new language, as Stockman later admitted), he said he believed he could raise defense spending, cut income taxes, and balance the Federal budget all simultaneously.

One of his first acts in office was to have the OMB's economic modelling computer reprogrammed when it predicted his policies would cause deficits ranging from $82 billion in 1982 to $116 billion in 1984.

His new software bent economics around to his liking, and bolstered his belief that he could cut $41.4 billion from the budget. There was only one area of the federal budget he was allowed to cut, however: social spending. All of this while Reagan had promised to increase defense spending by 7% per year.

Stockman had included in his plan, almost entirely to reduce criticism by liberals, some reductions to private sector subsidies. These were rejected by Reagan. Reagan's primary constituency was big business, and Reagan intended to see them happy.

Social spending was reduced, and social programs began to fall one after the other, but not to a savings of $41.4 billion. And, meanwhile, the projected real deficit was climbing toward an estimated $44 billion to $65 billion. Stockman knew the only way to make up the difference was to scale back defense spending. Reagan would have none of it.

Reagan's budget went into effect, the economy sagged dramatically, and Stockman was accused of breaking his promises. When his appeals to the necessity of cutting defense spending and Social Security were rejected yet again, he grew cynical. Stockman's dream of apolitical supply-side fiscal responsibility and rejuvenation were collapsing. Stockman griped to Atlantic Magazine about how politics were killing his budget and he soon left the administration.

The problem Stockman had run into (other than the basic untenability of his economics) was Reagan's political agenda. Reagan had every intention of gutting social spending so the private sector could expand its profit-making potential by replacing lost social services; again, being kind to his constituency. As such, Reagan had decided to engineer a deficit via massive defense spending; spending which, of course, also meant more profits to the corporate sector.

David A. Stockman: fiscally conservative idealist sacrificed to brutal political gods.