ABSTRACT
In 2001, the new Treasury Secretary Paul O’ Neill worried that
the huge deficit being run up by the US economy, and especially
by the government, made pre-emptive war in Iraq a reckless
venture. Frustrated by O’Neill’s caution, an irritated Vice
President Dick Cheney shot back: “Reagan proved deficits don’t
matter.”1 When this quote surfaced a couple of years later even
conservatives raised their eyebrows, and not unreasonably so:
this was the antithesis of the anti-government fiscal conser-
vatism that Bush and Cheney were supposed to represent. The
guffaws in the press were only muffled by the largely nonparti-
san despair felt about the sorry state of economic intelligence in
the Bush administration. The event quickly resurrected the label
George Bush Sr. had once applied to Reagan’s economic doc-
trines: “voodoo economics.”
