Policy Analysis No. 24

Deficits and the Economy

By Joe Stilwell
May 26, 1983

Executive Summary

We must get control of the budget monster, get control of our economy and, I assure you, get control of our lives and destinies.”

— Ronald Reagan: March 30, 1981

Two years after speaking those words, President Reagan remains further from controlling the budget deficit than any President has ever been. The reasons for this are numerous and debatable. The direct result, however, is clear — a $110 billion deficit for Fiscal Year 1982, the largest deficit ever. Unfortunately, the record will not stand for long. By any estimate, the deficits will be well above the $110 billion level through FY ‘88; if Congress does not approve Reagan’s budget requests, the deficits will easily be more than double the FY ‘82 record. The budget monster, apparently, will remain uncontrolled for a long time.

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Joe Stilwell, a graduate of the Wharton School of Business, is an associate policy analyst of the Cato Institute.