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P.T. BARNUM WAS RIGHT

This article is reprinted, by permission, from Inquiry Magazine. People Interested in subscribing to the publication can do so by sending $15 for one year (20 issues) to Inquiry, Dept. TMEN, 747 Front Street, San Francisco, California 94111.

The senators on the Budget Committee were feeling testy—or exultant, depending on their party preference—after three days of grappling with President Reagan's budget. Said a depressed Daniel Moynihan: "We have undone 30 years of social legislation in three days."

The Republicans, too, were impressed with the magnitude of the endeavor. "Extraordinary times demand extraordinary efforts," said Pete Domenici of New Mexico. Added Robert Kasten of Wisconsin: "We simply must break from the policies of the past." All around the country the newspapers said the same thing. Whether you were for it or against it, the editorial pages agreed, the Reagan budget was revolutionary, the most sweeping change in American policy since the New Deal.

But if we look closely at the Reagan budget, what we can see is that it's really the most sweeping success in American public relations since William McKinley persuaded the country that the Holy Bible ordained American control of the Philippines.

There are two aspects of this supposed revolution ...deep and startling budget cuts (which reverse the seemingly inexorable trend of the last several decades toward bigger government) and a deep cut in taxes for business and upper-income groups, as prescribed by supply-side economics. These tax cuts are supposed to stimulate large increases in saving, investment, and productivity.

(EDITOR'S NOTE: Put very simply, supplyside theory holds that by reducing taxes, the government can cause more people to save money which — in turn — will make more capital available to businesses, which can borrow the cash to upgrade equipment and so forth ...raising our national level of productivity and resulting in more money for the government and for the rest of us, as well.)

Curiously, the budget cuts seem to have met with surprisingly little disapproval from Democrats and other critics of the Reagan administration, except of course from the bureaucrats directly affected. "It's a phenomenal thing for Ronald Reagan," crows White House aide Michael Deaver, "for the New York Times, the Washington Post, Time magazine to say, 'Maybe it's time to reassess, maybe we don't need so much government.' The public mood is there."

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