Bye Bye, Balanced Budget

Reagan nixes more taxes, but keeps Congress guessing

The dilemma was painful, no less so because Ronald Reagan had inflicted it on himself. After pushing the biggest tax cut in U.S. history ($749 billion over five years) through a reluctant Congress and proposing $1.7 trillion in military spending in the next six years, could he also keep his promise to balance the federal budget by 1984? No way, his critics had insisted. As the recession further depressed revenues, automatically pushing up social spending, and projected deficits ballooned, even Budget Director David Stockman belatedly advocated...

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