Reagan's Blue Smoke

CANDIDATE AND PRESIDENT Reagan both placed heavy emphasis on "realism." NO more ambitious social programs, he vowed; "accepting the world as it is" was to be the administration's international credo. But to in his first major speech on the economy and in his advisers' subsequent specific additions to it, the president has placed his faith in an untested and highly speculative course of action that could very well worsen the economic "mess" he wants so desperately to clean up.

Reagan deserves credit for focusing on America's economic ills so early in his term. Yet in his tough talk about controlling inflation and reducing unemployment, there exists a substantial gulf between Reagan's optimistic predictions of his policies' effects and a "realistic" analysis of what they will do. Even in one of its first actions--the decontrol of oil prices--the administration found that its brand of realism might not be that realistic after all. Reagan and his advisers were surprised to see gas prices rise by about seven or eight cents a gallon after decontrol--and may also be surprised and disappointed not to see production increase as much as they expect. This shock may only be the first.

A realistic appraisal of a cut in Comprehensive Employment and Training Act (CETA) funding would show that many cities in this country will have no other way of paying many of their employees. That means more decrepit streets, more dangerous neighborhoods, less fire protection, less library service and less park maintenance. And because CETA jobs usually to go Blacks and other minorities the cuts will mean an increase in the already too high rates of unemployment among these groups. Cuts in Medicaid, while they might help eliminate waste, will definitely make quality health care an option available to fewer people in this country. And what a wonderful idea--slashing Food Stamp expenditures, one of the truly successful survivors of the Big Government era.

Cuts of a different sort--tax reductions--are Reagan's answer to inflation. He shares the Lafferite fantasy that the increase in available spending cash will stimulate the economy. Instead, the cuts, combined with his oft-repeated desire to balance the nation's budget, will only increase inflation and the need for reductions in services. And it is clear that Reagan, with his affection for things explosive, will not make those cuts where they are needed, in the bloated and wasteful defense budget. Amid the matrices, curves and general hysterics, other ways to trim inflation--price controls, perhaps, cuts in defense spending or genuine tax reform--have been rejected out of hand.

Reagan, clutching affectionately a dollar bill, promised a national televsion audience last week that he would restore the health of the American economy. That will not be done with the blue smoke of his brand of supply-side economics; it should not be done by sacrificing the nation's needy.