More specifically, the new policy doctrines have caused four great deformations of the national economy, and modern Republicans have turned a blind eye to each one.<\/p>\n
The first of these started when the Nixon administration defaulted on American obligations under the 1944 Bretton Woods agreement to balance our accounts with the world. Now, since we have lived beyond our means as a nation for nearly 40 years, our cumulative current-account deficit \u201d\u201d the combined shortfall on our trade in goods, services and income \u201d\u201d has reached nearly $8 trillion. That\u2019s borrowed prosperity on an epic scale….<\/p>\n
The second unhappy change in the American economy has been the extraordinary growth of our public debt. In 1970 it was just 40 percent of gross domestic product, or about $425 billion. When it reaches $18 trillion, it will be 40 times greater than in 1970. This debt explosion has resulted not from big spending by the Democrats, but instead the Republican Party\u2019s embrace, about three decades ago, of the insidious doctrine that deficits don\u2019t matter if they result from tax cuts.<\/p>\n