Political Quotes

“last year I presented three papers to the Senate urging opposition to this constitutional amendment. The first paper argued that the existing deficits were a recent event and marked a sharp departure from the fiscal problems of earlier administrations, which were directed primarily to the problem of a persistent full employment surplus, with its accompanying downward pressure on consumer demand. The second paper related the singular events of the 1980s, which led to huge deficits and a huge debt. The third paper explored the folly and danger of writing into the Constitution decrees concerning fiscal policy which would have been inappropriate to a small 18th century republic, and would be potentially destabilizing to a world power in the 20th century. In the FY 1973 budget, OMB Director George P. Shultz explained the ``full-employment budget concept'' as follows: . . . expenditures should not exceed the level at which the budget would be balanced under conditions of full employment. Which is to say that in the absence of full employment, as was the case in FY 1973, the Federal government should deliberately contrive to incur a deficit equal to the difference between the revenues that would actually come in at levels of underemployment, and those that would come in at full employment. Far from being inevitable and unavoidable, there were points in the business cycle where a deficit had to be created. Otherwise, surpluses would choke off recovery.…”