Cato Policy Analysis No. 24 May 26, 1983

Policy Analysis

Deficits and the Economy

by Joe Stilwell

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

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 def cit ever. Unfortunately, the record will not stand for long. By any estimate, the deficits will be well above the $110 bil- lion level through FY '88; if Congress does not approve Rea- gan'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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