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Warns on Economy : Blame Taken by Stockman for Deficits

Times Staff Writer

If he had never become budget director for President Reagan, David A. Stockman said Wednesday, the U.S. economy would have been better off than it is today.

Stockman accepted responsibility for the huge budget deficits of the Reagan Administration but insisted that they are propelling the nation toward economic disaster.

In a Times interview that was part of the blizzard of publicity designed to launch his book, “The Triumph of Politics,” onto the best-seller lists, Stockman argued that Reagan’s continuing efforts to trim domestic spending are doomed to defeat in Congress. Because he said further defense cuts would be dangerous, he advocated a major tax hike.

“In the general proposition that there has to be a tax increase,” Stockman said, “I think he (Walter F. Mondale) was right.” Mondale, as the Democratic presidential nominee in 1984, insisted that only a tax increase could restore balance to the federal budget.

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Convinced that the deficits will come back to haunt the Republican Party, Stockman warned that the Reagan Administration’s budget policies are “undermining the integrity and credibility of conservatism. . . . We can’t keep getting away with the free lunch forever. People will remember it was Republican economics that got us into this mess.”

Characteristically, Stockman said he sees nothing unusual or wrong in castigating his former colleagues and attacking the Administration that he served for five years. His book is spiced with criticism of Cabinet officials and high-ranking White House aides, including Michael K. Deaver, former deputy chief of staff and probably Reagan’s closest confidant in government.

Reagan Dismissal Echoed

“It isn’t really nasty or spicy to say Mike Deaver had no interest in policy,” Stockman said. “He goes around pleading the case now so he can’t be charged with conflict-of-interest in his lobbying.”

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The Reagan Administration, in a carefully orchestrated effort to ignore Stockman, continued to refuse public comment on his book. About all officials are willing to do is echo Reagan’s dismissal of the book last week: “I don’t have time for fiction.”

But Stockman is undaunted by either the Administration’s silence or the chorus of condemnation he has received from others since the first excerpts of the book were published in Newsweek magazine last week.

“This is my version of what happened,” Stockman said. “Take it or leave it.”

Stockman’s complex view of what he calls the “failure of the Reagan Revolution” centers on the early days of Reagan’s presidency, when, as a 34-year-old whiz kid burning with ideological fever but with barely any national political experience, he was elevated to one of the most influential positions in the Administration.

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Dazzling ‘Paper Plan’

“Had they stuck to the formulation of the (election) campaign,” Stockman said, “I don’t think it would have ever gotten off the ground.”

What rammed the Administration’s massive three-year tax cut--the heart of Reagan’s campaign promise--down the throat of a reluctant Congress, Stockman argued, was his dazzling “paper plan” to cut spending and propel the economy to a balanced budget under the Administration’s overly optimistic economic assumptions.

Stockman blamed his zealous efforts to slash spending for giving Congress a “misguided belief” that its 1981 budget-cutting bill had made a “down payment on the deficit.” And without that belief, he said, “there would have been a real stalemate” on taxes.

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Would the nation have been better off if Stockman had failed and there had been no tax cut? “Yeah,” he said with a smile of bittersweet irony that expressed both the arrogance and self-confidence that kept him going inside the Administration for several years after he was convinced the political system had taken a wrong turn on economic policy in 1981.

“I believed that surely once it was understood . . . once the facts and the numbers and the palpable realities (were revealed), we could get it corrected,” Stockman said at a news conference Wednesday. “That’s why I stayed, to try to get it corrected. But obviously that failed.”

An ‘Ax to Grind’

Despite his failure, Stockman is still trying to get the message across. “I have an ax to grind,” he said, in explaining why he wrote the book, for which Harper & Row reportedly paid him an advance of $2.4 million.

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With the economy relatively prosperous today, however, Stockman may be in danger of being dismissed as the boy who cried “wolf” once too often.

Already, many of his friends--such as conservative columnist George F. Will--have attacked him. “Stockman’s book demonstrates how youth can be a menace to good governance,” Will wrote in a recent column. “There is an off-putting tone of knowingness to this book that now arrives, overflowing with condescension toward Reagan, in the midst of an economic boom.”

Yet Stockman remains convinced that events will ultimately prove him right. “There is no doubt that there is a slow bleed going on with the health of this economy,” he said, warning that the situation will only get worse.

“I have a more existential feel for what those numbers mean and how bad they can go,” he said. Other people “don’t understand all the booby traps in there.”

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