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Posted by: Joel Gaines on

10:24 AM  

I think you are absolutely correct about the myth. What President Reagan really did, as opposed to President Carter, was make it understood the build-up was to oppose the threat of further expansion by the Soviets and that he was not afraid to employ the military to stop that expansion.

He forced the Soviets into a game of keeping up with the Jones' which their economy could not support. Since the Soviet economy was closed and artificially tied to their monetary system, for them deficit was bad.

Deficit has become one of those evil words. Think of this, though: While our deficts are climbing, we are enjoying near historic growth economically. Our debt is bought by foreign governments, mostly in dollars, because they know we are good for it. We should recognize that we have cable TV and $80 sneakers despite deficit. I am not touting the benefits of deficit, just that sometimes you borrow against your house to buy that income property, which in turn will create the revenue stream to more than cover the loan against the house in the long run.

The American economy is very resilient to deficit and we have a government, which will ensure that our debt isn't eating too much of the GDP. It's a media myth that all deficit is bad. It isn't just a Republican thing though; look at Kennedy.

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