Laffer Hits Back After Stockman Slight : Says of Former Reagan Budget Official: ‘He Never Understood’

In his controversial new book, former Reagan budget official David Stockman tries to discredit supply-side economist Arthur Laffer, saying that Laffer became “glib” and “disingenuous” about the federal deficit when it began to balloon in the early days of the Reagan Administration.

On Friday, Laffer took some shots at Stockman at a Los Angeles press conference.

“David Stockman just never got it,” said Laffer, a Republican candidate for the U.S. Senate in California. “He never understood that the way to attack the deficit is not to raise taxes. That is the worst thing you can do to the economy.”

In the book, “The Triumph of Politics: Why the Reagan Revolution Failed,” Stockman contends that President Reagan and his closest advisers deluded themselves that the economy would not be hurt if they cut taxes and raised military spending. Stockman also charges that Reagan lacked the will to force major cuts in domestic spending.

Thus, writes the former director of the Office of Management and Budget, the deficit went through the roof and the “Reagan Revolution” failed. He argues that unless taxes are raised soon, the deficit will greatly undermine the economy in the years ahead.

Laffer, who helped sell Reagan on the idea of tax cuts to create economic growth, said Friday that he wondered why Stockman did not make his views better known when the two of them were meeting with other members of Reagan’s Economic Advisory Board.

“Funny thing about David Stockman,” said Laffer derisively. “He sat there at those meetings and never said a word.”

Laffer also assailed Stockman for writing a book that second-guesses his former patron Reagan.

“It just isn’t appropriate,” Laffer said. “He’s taking advantage of a previous position. But David Stockman has done this throughout his career. He works for people and then betrays them. . . . It just shows the hostility that lives within David Stockman.”

Stockman writes in his book that once he realized spending would not be cut as much as he wanted, he tried to get Reagan to delay the 1981 tax cuts, which were in three stages.

“That was absolutely the wrong solution,” Laffer said. “Never delay a tax cut. You simply delay economic recovery.”

Pointing to the recent decline in interest rates, Laffer contended that the “Reagan Revolution” is alive and well. As for the deficit, he said, “since Stockman left office the deficit has actually dropped from $300 billion to $150 billion. So he’s just got it all wrong.”