David Stockman was the Republican golden boy in 1980 when Ronald Reagan swept into office in a historic landslide election.
A 30-something Michigan congressman, he became Reagan's budget director and set in motion a whole revolution in the way we thought about federal spending, tax policy, regular welfare and corporate welfare.
He was on CNN last night on Eliot Spitzer's show and had a number of intriguing ideas on today's budget deficit.
First, he says, Obama and Congressional Republicans are absolutely not even close to taking this debt situation seriously. He says we've got all this new debt to issue, but big buyers of the past Japan and China are not buying it. Japan, for obvious reasons--their nuclear problems, and China because, they've just recorded their first trade deficit in five years.
And the biggest bond house is actually short the Treasury bonds, meaning it's in line to sell them, not buy them.
Stockman says conservative House Budget Chairman Paul Ryan's is not even close to what's needed, with taxes 17 percent of GDP, a level he says hasn't been achieved since the 1930s.
So, to balance the budget and get the debt down, Stockman recommends revenue increases as well as budget cuts. He recommends tax rates go back to what they were under his old boss, even higher than what is being suggested by Obama.
All programs should be means tested. If your a billionaire, you probably shouldn't get Social Security.
He also does not advise trying to close corporate loopholes. He said the billion dollar lobbies will absolutely defeat any kind of such proposal.
He recommends, again surprisingly, a "churn" tax on Wall Street, a fee for every stock transaction. This will not only raise a lot of revenue, but discourage rampant speculation that is not healthy.
Stockman, of course, came clean with all the Washington budget shenanigans, including some agreed to by his old boss, in the famous Atlantic Monthly article, I believe it was called, "the education of David Stockman."
Fascinating guy who more people should be listening to.
Here's the interview on CNN
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If all programs should be means-tested, should those deemed not in need of a program be allowed to opt out paying for it? To be sure, the higher one's income, the less they need to rely on government. I'm about $999,950,000 from being a billionaire and would love to opt out of Social Security, for instance. I don't want to pay in and I don't want the benefits, so I would like to be means-tested out of social security and be paid back all the money I contributed so I can supplement my retirement by my own means. The government won't have to worry about me - what could be better?!
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