Making It Work

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President's second round of budget cuts. Feldstein said that inflation would not be tamed unless monetary policy remained strict and consistent for several years. Liberal economists on the board were concerned about the social cost of the program; Heller, for one, argued that the policy will place an unfair burden on the poor, who are dependent on federal assistance programs. But the board's liberals also conceded that Reaganomics will hold down Government spending and thus have a chance to stem inflation.

And that, as any economist is sure to agree, would be quite a feat. For nearly two decades, repeated and abrupt changes in economic policy were a major cause of erratic growth and persistent inflation. Administrations from Lyndon Johnson to Jimmy Carter adopted anti-inflationary programs, but these proved to be either ineffectual or too brief to achieve significant returns. Result: chronic stagflation.

Reaganomics is clearly not the painless quick fix that the President promised during his campaign and the early weeks of the Administration. The program will take time, and it will not be easy. Reagan admitted as much last week during his talk to the Cabinet about further budget cuts. Said he: "Some people are frustrated because we don't see instant recovery. We can't be stampeded now by frustration or fear. We have to stay on a steady long-term course." Reaganomics can work, its namesake was saying, if the American public—and politicians—are patient enough to let it work.—By Charles Alexander. Reported by David Beckwith /Washington, with other U.S. bureaus

* The board members: Otto Eckstein, Martin Feldstein, Alan Greenspan, Walter Heller, James McKie, Joseph Pechman, Charles Schultze. * Actually, the cocktail napkin's role in the story may be apocryphal. Laffer cannot remember drawing on it, and Cheney also does not recall it. Other supply-siders say that Wanniski dreamed up the story to add some pizazz to a dry subject. But Laffer now draws the curve on napkins and autographs them for admirers.