The Age of Entitlement: America Since the Sixties

by Christopher Caldwell

Lyndon Johnson thought the welfare programs he launched in the 1960s were in the spirit of Roo- sevelt’s dam-building and road-building and mural-painting. They would pump money into the economy just as effectively, and stimulate things. But Johnson was wrong. By the mid-1970s, unemployment and inflation were rising in tandem, confounding familiar models. Economists who had cheered LBJ’s welfare experiments, such as Harvard’s John Kenneth Galbraith, lost the ear of elected officials. Skeptics, such as Milton Friedman, came into vogue. The first measures to scale back taxation and spending were passed under Democratic president Jimmy Carter in the 95th Congress, in which Democrats held over two thirds of House seats, and it was Carter’s appointee to head the Federal Reserve, Paul Volcker, who determined to wring inflation out of the economy by pitilessly tightening the money supply, starting in October 1979.