Rep. Jack Kemp, R-N.Y., was still campaigning for the nearly forgotten supply-side economic theory Tuesday night, saying a lot of people are making "dumb statements" about the federal budget deficit.
The former Republican presidential candidate told reporters that the "maniacal focus" on the deficit these days is misplaced, exaggerated and possibly detrimental to instigating continued economic growth, and he said some of the government's top advisers are making "dumb statements" about the deficit.One such statement, Kemp said, was the recent assertion by Alan Greenspan, chairman of the Federal Reserve Board, that the deficit is eating away at the vitality of the American economy. Another was one by Martin Feldstein - former head of President Reagan's Council of Economic Advisers and now an adviser to President-elect George Bush - that the United States should devalue the dollar.
Kemp said stimulating economic growth should be a more important goal than reducing the deficit, which he said is a manageable 3 percent of the gross national product. "The danger of the budget deficit is that it'll lead our country into making the wrong policies," possibly causing a recession, he said.
While others have suggested the deficit should compel Bush to back away from his campaign promise not to raise taxes, Kemp said: "He's stuck with his `no-tax-increase,' `flexible-freeze' statement, and I think that is a very good thing."