Kemp-Roth Meets the O’Neill Gang

When House Speaker Tip O’Neill called a meeting last month of the Democratic Steering and Policy Committee, he asked some of the high priests of the Keynesian faith to attend the services. These practitioners of the Dark Side of Economics—what one might well call voodoo economics—were summoned to O’Neill’s chambers to tell senior Democratic leaders what they so desperately wanted to hear: what is wrong with cutting income-tax rates as President Reagan has proposed.

The economists, Otto Eckstein, Walter Heller, along with a few acolytes from the Brookings Institution, didn’t disappoint O’Neill and his friends. According to an observer at the closed-door meeting, the Democratic chieftains “played devil’s advocate by challenging them to respond to the Administration’s claims for the Reagan tax package.” Their unanimous predictions of what would happen if Kemp-Roth were passed: rampant inflation, a skyrocketing deficit, high unemployment, severe recession.

DL

About the Author

Donald Lambro

Featured Tags

When House Speaker Tip O’Neill called a meeting last month of the Democratic Steering and Policy Committee, he asked some of the high priests of the Keynesian faith to attend the services. These practitioners of the Dark Side of Economics—what one might well call voodoo economics—were summoned to O’Neill’s chambers to tell senior Democratic leaders what they so desperately wanted to hear: what is wrong with cutting income-tax rates as President Reagan has proposed.

The economists, Otto Eckstein, Walter Heller, along with a few acolytes from the Brookings Institution, didn’t disappoint O’Neill and his friends. According to an observer at the closed-door meeting, the Democratic chieftains “played devil’s advocate by challenging them to respond to the Administration’s claims for the Reagan tax package.” Their unanimous predictions of what would happen if Kemp-Roth were passed: rampant inflation, a skyrocketing deficit, high unemployment, severe recession.