Monday, March 04, 2013

THE SEQUESTER MESS

Robert Samuelson blames JFK for setting in process the notion that the nation can ignore budget deficits.  Debt became an accepted government policy.

What Kennedy did was this: In early 1963, he proposed a $13.6 billion tax cut (today: about $320 billion) even though the economy was not in recession and the tax cut would enlarge the budget deficit. Kennedy adopted the theory that government could, by manipulating its budgets, increase economic growth, reach “full employment” (then a 4 percent unemployment rate) and reduce — or eliminate — recessions.

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