Economic Report of the President
Department of Defense Annual Report to the Congress, Fiscal Year 1985
In their elated, vainglorious 1984 reports, Reagan’s advisers suggest that their economic and military policies constitute a single “spirit.” I think they are right. It is a spirit that dishonors—and may destroy—the world that Mr. Reagan proposes to lead.
“America’s new strength, confidence, and purpose,” Mr. Reagan said in his State of the Union speech, “are carrying hope and opportunity far from our shores.”1 For the Department of Defense, this means that the United States has been able to “reassume a leadership role,” and that “in the military balance…in Grenada and Lebanon…President Reagan’s leadership enhanced deterrence by strengthening the confidence of our friends and allies.”2 For the Council of Economic Advisers, it means that “in 1983 a vigorous recovery, originating in the United States, began to lead the world out of recession.”3
Mr. Weinberger’s world is not Mr. Feldstein’s, and neither is more than the delusion of an insolent imagination. “The outlook is not entirely sunny,” the Economic Report concedes: that is to say, there are eighteen million people unemployed in Western Europe; unemployment rates are higher than a year ago in all the major economies except the US and Canada; and “capital flowing out of some European countries probably kept real European interest rates higher and European investment lower than they would otherwise be.” 4 In Latin America “the standard of living of most of the population, including the middle class, has deteriorated sharply”; the standard of living of the poor, that is to say, has fallen below destitution as Brazil, Mexico, and Argentina pay interest on a debt of more than $210 billion through a simultaneous recession that has cut imports almost in half.
Most of the world is invisible to the Economic Report. In the low-income countries of Africa, per capita income has been falling by 1 percent a year since 1970, and per capita food supplies are below their 1970 level.5 For Mr. Feldstein, Africa and the poor countries of Asia merit one line in his entire account of the “world economy.” This is in a reference to the multilateral lending agencies which US policies are now devastating: the World Bank’s International Development Association lends to “countries that are poor and have always been poor.”6 Mr. Weinberger is more prosy. A Soviet “global campaign of destabilization, focused on the Third World…is, and will continue to be for some time, the most prominent direct threat to US national security interests.”7 Africa, in his report, is where US forces engage in training and maneuvers with Egyptian troops, “combined operations” with the army of Sudan, and “amphibious operations” in Somalia. The US “dealt with [an] incident” in Chad, provided “major” security assistance to eleven African countries, and started to build military facilities in Egypt, Kenya, and Somalia.8
Mr. Reagan’s America is not, of course, a delusion. But the American economy is itself subject…
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