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The United States economy is confronted with major problems; these include soaring rates of inflation, high levels of unemployment, low rates of national savings, and meager rates of productivity growth. Not withstanding a major war on poverty, a large fraction of the population, virtually one in every ten Americans, still lives in poverty; our Social Security system, despite massive tax increases, still promises to go bust; our military machine already absorbs five percent of income, yet demands a still higher fraction of the national paycheck to keep its helicopters from kissing in the night, and we have a host of dismayed and desperate citizens living in dark, chilly, and decaying cities. Undaunted by a decade of relentless stagflation, entrenched poverty, and industrial decline, the new administration is prescribing a sure-fired remedy that promises to alleviate if not cure many of our economic ills. Significant reductions in tax rates, on the order of 30 percent, we are told, will stimulate savings, increase productivity, curb inflation, and generally rebuild the US economy. What's more, these tax cuts are essentially free; they will increase rather than decrease tax revenues. American workers and entrepreneurs will respond so vigorously to the removal of the fiscal shackles that the tax base will increase significantly leaving tax collections unchanged or even larger than they were to begin with. Well, it is time to stop day dreaming and face facts. Major cuts in tax rates will dramatically lower real government tax revenues. Unless these tax cuts are accompanied by significant reductions in government spending, which seems unlikely given anticipated increases in …