The Stockman perspective

Reagan's budget head, David Stockman, who was influential in applying the supply side theory to the government budget during the 80's, weighs in here on the present conditions and the possible shutdown of the government.  In essence he says the current fiscal crises is so manifestly huge and the proscriptions offered by the Ryan Budget and others so timid and inconsequential that a shutdown would be a good idea just to get people's attention.  His is the ultimate apapoliptic view and one that many consider realistic.  After all, our government is still spending much more than its revenues, 40% more, and has a huge debt overhang which is obviously growing each day.  His problem with the Ryan plan is its lack of attention to the immediate problem of the 50+ trillion dollar debt.  In other words Ryan's plan makes sense for running the government on a sound basis once the 50+ trillion overhang has been dealt with.  By this he implies that the interest payments are the 500 pound gorilla in the room because those payments are not going to go away and will likely increase as interest rates inevitably rise because they are at historically and abnormally low levels.  Stockman argues, without a plan, for dealing with the size of the debt and then worry about the balanced budget plan offered by Ryan.  Short of debt liquidation or default by the government, it is hard to see how we get out of this dilemma.