Arthur Laffer at OMB, 1970-72

This set of documents pertains to Arthur Laffer’s stint as chief Economist at the Office of Management and Budget from 1970-72. His main notoriety from this position derived from the economic model he developed in 1970, and which confirmed the feasibility of the Council of Economic Advisers (CEA) goal of a “1065” $billion or $1.065 trillion gross national product for 1971. The model demonstrated that monetary policy changes have little but a brief immediate effect on the economy, spending changes barely any more.

The press went wild with the “1065” number, implying that only Laffer’s model justified it. Documentary evidence from the Nixon papers show that the CEA had come up with the 1065 number of its own in the summer of 1970 and furnished it to OMB months later—it was a given number that Laffer then checked in his model.