David Stockman on TARP, the Fed, Ron Paul and Reagan [FULL VERSION]

At the very start of the “Reagan revolution,” David Stockman exposed the myth that Ronald Reagan and the modern Republican Party are dedicated to small government. In 1981, the 35-year-old Stockman gave up his Michigan seat in Congress to become Reagan’s budget director. A vocal critic of what he continues to call the “welfare-warfare state,” Stockman had signed on because he believed in the limited government rhetoric that Reagan espoused. Once inside the White House, Stockman quickly became disenchanted, and gave an interview to journalist William Greider that became the basis for an explosive Atlantic Monthly article in which Stockman admitted that Reagan’s spending cuts had been a “Trojan horse” used to justify tax cuts. In his 1985 memoir, The Triumph of Politics, Stockman chronicled Reagan’s reluctance to fulfill his campaign promise of shrinking the size and scope of government and balancing the budget. The result? The gross federal debt tripled while Reagan was in office. Last fall, Stockman was the GOP-defector du jour once more, arguing against extending George W. Bush’s tax rates in the New York Times, on 60 Minutes, the Colbert Report, Parker-Spitzer, ABC, NPR, and MSNBC. Stockman’s argument – that it’s irresponsible to cut taxes when cumulative US debt is steadily mounting as a percentage of GDP – is based on the simple principle that balanced budgets come only when revenues actually meet expenditures. If we’re not willing to actually shrink government …