With the arrival of Ronald Reagan in the White House, this idea was first introduced as part of an extraordinary ''supply-side revolution'' in fiscal policy, needed (so the thinking ran) as a one-time fix for an economy gripped by stagflation. To those who worried about more debt, they said, Relax, it won't happen -- we'll ''grow out of it.'' Over the course of the 1980's, under the influence of this revolution, what grew most was federal debt, from 26 to 42 percent of G.D.P. During the next decade, Republican leaders became less conditional in their advocacy. Since 2001, the fiscal strategizing of the party has ascended to a new level of fiscal irresponsibility. For the first time ever, a Republican leadership in complete control of our national government is advocating a huge and virtually endless policy of debt creation.

. . . So there you have it: in just two years there was a $10 trillion swing in the deficit outlook. Coming into power, the Republican leaders faced a choice between tax cuts and providing genuine financing for the future of Social Security. (What a landmark reform this would have been!) They chose tax cuts. After 9/11, they faced a choice between tax cuts and getting serious about the extensive measures needed to protect this nation against further terrorist attacks. They chose tax cuts. After war broke out in the Mideast, they faced a choice between tax cuts and galvanizing the nation behind a policy of future-oriented burden sharing. Again and again, they chose tax cuts.

You might suppose that a reasoned debate over this deficit-happy policy would at least be admissible within the ''discussion tent'' of the Republican Party. Apparently, it is not. I've seen Republicans get blackballed for merely observing that national investment is limited by national savings; that large deficits typically reduce national savings; or that higher deficits eventually trigger higher interest rates. I've seen others get pilloried for picking on the wrong constituency -- for suggesting, say, that a tax loophole for a corporation or wealthy retiree is no better, ethically or economically, than a dubious welfare program.

For some ''supply side'' Republicans, the pursuit of lower taxes has evolved into a religion, indeed a tax-cut theology that simply discards any objective evidence that violates the tenets of the faith.

So long as taxes are cut, even dissimulation is allowable. A new Republican fad is to propose that tax cuts be officially ''sunsetted'' in 2 or 5 or 10 years in order to minimize the projected revenue loss -- and then to go out and tell supporters that, of course, the sunset is not to be taken seriously and that rescinding such tax cuts is politically unlikely. Among themselves, in other words, the loudly whispered message is that a setting sun always rises.

. . .''Economists love maximum efficiency. But people don't. We want market efficiencies to make us richer, but we don't like what an efficient market feels like.'' . . .In the aggregate, sure, flexibility is a good thing. But we don't live in the aggregate; we live down here at sea level, and these days every time someone who seemed unsinkable vanishes beneath the economic waves, those around him recalculate their own odds of staying afloat. The human nervous system wasn't built for extended uncertainty. Like other animals, we react predictably when faced with a threat. Our pulse accelerates, our breathing comes in shallow gasps. Ordinary biological activities -- digestion, immune function, tissue repair -- shut down until the threat has passed. And there's the rub. In the wild, the threat passes quickly, one way or another. But for homo economicus, the threat never goes away, even or especially if it never quite arrives. Unlike most other animals, points out Robert Sapolsky, a neuroscientist, human beings can -- and often do -- experience stress simply by imagining stressful situations. No immediate threat is necessary. ''For 99 percent of the beasts on this planet,'' Sapolsky tells lecture audiences, ''stressful situations include about three minutes of screaming terror, after which the threat is over or you are over. We humans turn on the exact same stress response thinking about 30-year mortgages.'' And mortgage-induced terror often lasts much longer than three minutes.

. . . Unable to predict or control the shocks that life administers, we respond to chronic, unrelieved stress just as do the most unfortunate rats: muscle atrophy, diminished sex drive, hypertension and all the other ailments that ensue when we shut down all processes except those needed to deal with a clear and present danger. This is what leads researchers to predict that 50 years from now, the biggest public health problem in the developed world will be depression.

. . . That's the devil's bargain of the sink-or-swim economy: from the highest to the lowest, the price of ever-greater collective stability is ever-greater individual insecurity. Although we drift in the same sea, it's hard to feel we're all in the same boat. Isolation, Mauboussin theorizes, is another byproduct of idiosyncratic volatility. . . . The more connected we become, the more complete our isolation. [Also,] ''There's a trend toward dog-eat-dog.'' The fear of layoffs that Greenspan noted extends vertically to the boss and horizontally to anyone younger, smarter, cheaper who threatens our jobs. So much for worker solidarity -- it's hard to make common cause with someone who, we suspect, wants to snatch the bread from our mouths. In such circumstances, Hobbes's ''war of all against all'' is less a bleakly accurate observation than a self-fulfilling prophecy.

When dot-coms were going to take over the world, there was much approving talk of the free-agent economy. Have skills, will travel: human capital was like any other form of capital in the friction-free economy, there to be reallocated as the market might dictate. In this new stage of economic evolution, our job security would evaporate, but our wealth would increase. Or so went the sales pitch. In reality, our jobs are less secure, but all the job-hopping doesn't make us richer. . . . Still, the notion persists that we can and will climb from a well-paying job to one better, as the bidding for our services heads ever higher. ''Everyone thinks they're going to be a major-leaguer,'' Ratajczak says with a laugh. ''Everyone's above average.'' But rising doubts may be eroding that assurance. . . . Consumers . . . slowly, grudgingly, . . . are losing faith in the American master narrative, with its promise of social and economic advancement in return for hard work. Americans have always taken for granted that better days are coming. Is our present angst the first flicker of suspicion that the better days have already been and gone?

''Whatever the theory is behind trickle-down economics, I don't think people are seeing it here,'' Doyle says. ''You watch these school districts struggle mightily with their budgets, and you think that if even a small part of these tax cuts were going instead toward helping education in this country. . . . '' His voice trails off, and he turns up his hands in surrender. . . . ''I joke with people that the only things we're waiting for are the plagues and the locusts,'' says Tim Pawlenty, Minnesota's new Republican governor. . . . The only things trickling down from Washington, it seems, are impossible choices -- and the blame for making them.

Instead, desperate governors are slashing the aid that flows from each state to the cities and towns where people actually live. And this is the hidden effect of the Bush tax agenda -- beyond the expanding deficits and favoritism toward the wealthy -- that a lot of taxpayers don't yet seem to grasp. If Bush and Congress cut taxes, and your governor doesn't raise them, then the buck ultimately stops with your mayor, who has to find ways to pay the police and firefighters, paint schools and pave roads. That'll mean higher property taxes or fees on services like garbage collection, or maybe the town will decide it's time to reassess the value of your house. Either way, you're likely to be paying someone else the money you no longer send to Washington.

In a sense, Republicans are using the very same tactic against the states that Reagan employed to win the cold war against the Soviet empire: force your enemy to spend himself into poverty until, at some point, the infrastructure on which he stands gives way and topples.

. . . With no money for overtime, undercover drug officers sometimes simply stop what they are doing — for instance, tailing suspects or executing search warrants — when their shifts end. Because the city also has little money for public defenders, Mark Kroeker, the Portland police chief, said officers were now giving a new version of the Miranda warning when they arrested a suspect in a nonviolent crime. "They effectively have to say, `If you can't afford a lawyer, you will be set free. Enjoy,' " Chief Kroeker said. . . . [With crime rising,] "The scary thing is that the worst results are still six months down the road, as the bad guys realize nothing is going to happen to them, and then you start to get an increase in gang shootings, armed robberies and homicides," Chief Kroeker said. [The system is] so short of money that they have stopped prosecuting drug and property crimes, like burglary and auto theft, until at least July 1. . . . Chief Olson said he had lost another 81 police officers because President Bush had essentially eliminated a Clinton administration program that provided money to add 100,000 police around the country. . . . Beyond budget cuts, the war on terrorism is also depleting law enforcement resources. . . . The Portland police have also been hurt by orders from Washington to go on terrorism alerts. . . . What is particularly painful, experts say, is that many of the strategies devised in the 1990's to reduce crime are now being abandoned or cut back because of the national economic slump and widespread budget cuts. . . . "I put on my sheriff's uniform and I went down to the Legislature in Salem and testified," he said. "I told them, This is how bad Oregon has become — law enforcement has to come beg you for money for crooks, so we can appoint lawyers for them and prosecute them and hold them in jail." . . . [The district attorney] has largely had to give up some of his favorite innovations: a drug court, a mental health court and a community court for resolving low-level disputes.

The top Medicare official said today that the Bush administration had "significant disagreements" with a bipartisan Senate proposal to add prescription drug benefits to Medicare, and he reaffirmed President Bush's desire to encourage elderly people to join private health plans by offering them extra drug benefits. . . . First, Mr. Scully said, Medicare beneficiaries will not have a strong incentive to enroll in private plans if they can obtain coverage for outpatient drug costs through the traditional fee-for-service Medicare program, which now covers 88 percent of the 40 million beneficiaries. . . . Administration officials say they believe that private plans provide better, more coordinated care and can manage costs better than traditional Medicare. But economists say the savings are highly uncertain, because private plans have higher administrative costs and tend to pay doctors and hospitals more than Medicare pays. . . . Senator Don Nickles, Republican of Oklahoma, said the assistance for low-income people was so extensive that it might encourage them to use more medications than they needed.

William H. Donaldson, the chairman of the S.E.C., expressed concern in a speech last night, though he did not specifically name Xerox. "The fight against corporate fraud requires resolve in the boardroom and at all levels of government," he told the New York Financial Writers' Association. "I'm concerned about companies that, under permissive state laws, indemnify their officers and directors against disgorgement and penalties ordered in law-enforcement actions, including those brought by the commission. "In my mind, this just isn't good, sound public policy," he said. "This is an area in which we may need to consider ways to bring about reform."

If biblical prophets like Amos and Isaiah had read last week's news about what happened to child tax credits for low-income families, they surely would be out screaming on the White House lawn about the justice of God - and be quickly led away by the Secret Service. . . . Let's tell it like the prophets might have: The decision to drop child tax credits for America's poorest families and children in favor of further tax cuts for the rich is morally offensive. It is blatant disregard for the poor, and an outrageous bias toward the rich. In religious terms, the exclusion of any benefits for poor children in the new tax bill should be named as a political sin. And those politicians who utter the words of religion and faith, yet who supported this exclusion of the poor, deserve to be called hypocrites. The White House, which approves all these choices, engages in moral double talk when it espouses faith-based initiatives, then allows the abandonment of poor families. The Republican House and Senate leaders who made these choices against the poor should be ashamed of themselves.

[A] Bush administration official said White House aides had concluded that there was political peril in being perceived as opposing a tax break for low-income working people, and that President Bush was likely to signal House Republicans soon that they should compromise with the Senate.

The indictment depicted Ms. Stewart as going out of her way to conceal the circumstances of the sale of nearly 4,000 shares of ImClone Systems, a transaction that investigators say she made after learning that her friend, Samuel D. Waksal, the company's founder, and his daughter were selling their own stock. Indeed, the charges focused less on the trade than on an elaborate cover-up that prosecutors say came afterward. According to the indictment, Ms. Stewart lied to investigators by telling them that she and her stockbroker had previously agreed to sell the shares if their market value fell below a certain price, and altered a phone message from the broker in her assistant's computer "immediately following a lengthy conversation with her attorney."

The former chairman of McKesson, the US healthcare distribution group, was indicted on Wednesday on charges of orchestrating an accounting fraud that cost investors more than $9bn. Charles McCall was one of three former executives charged with securities fraud allegations relating to a long-running scheme to artificially inflate revenue and net income at a medical information company acquired by McKesson in 1999. . . . Authorities said the accounting irregularities enabled HBOC to continually exceed analysts' quarterly earnings expectations. . . . Authorities claim the defendants signed side deals that allowed customers to secretly cancel software contracts. In addition, they are alleged to have backdated contracts and swapped inventory to increase revenue.

For example, in India — a country that holds huge promise for Western drug makers — Novartis began its donations of Glivec with a warning that it would halt the program if the government let local companies eat into its profits by selling generic versions of the drug. Hundreds of Indian cancer patients got Glivec free, and commercial sales soared, as well. But after India cleared generic Glivec for sale, Novartis made good on its threat last month, saying it would leave it to Indian companies to meet the needs of the indigent.

. . . With Glivec, Novartis has stumbled in reaching the neediest people. Its international patient assistance program — run by a tiny nonprofit group that Novartis selected after established charities turned down the job — has gotten the drug to just over 1,500 patients outside the United States. In the 49 poorest countries, where Novartis estimates that 9,500 patients could be helped by Glivec, the program has reached 11 people, according to the latest count.

Both [consumer] advocates and investors agree that the latest rule changes are likely to let media leviathans like the News Corporation and Viacom fortify their positions while increasing the odds against newcomers and small fry. The changes mainly loosen restrictions on the ownership of local television stations. But even in the one area — the radio industry — where the Federal Communications Commission tightened the rules on media consolidation, the changes will have the unintended effect of making it more difficult for smaller rivals to challenge the dominance of the industry giant, Clear Channel Communications.

. . . "Whether you call it revolution or evolution, the big companies now have the opportunity to be even bigger and stronger," said Blair Levin, a former top official for the commission who is now an analyst at the investment bank Legg Mason. . . . The change was a victory for the major networks, raising the cap on the maximum share of the national audience one company can reach with its stations to 45 percent from 35. News Corporation's Fox television subsidiary and Viacom's CBS division already own stations reaching about 40 percent of the market. But owning more stations gives the networks more power over their affiliates in negotiations over fees and what programs to show. It also enables the biggest companies to consolidate the advantages of size over their smaller competitors.

The leaders also approved an action plan on health to help developing nations overcome shortages of essential medications. France had proposed a draft version that included measures like ensuring greater access to generic drugs in developing countries, improving access to branded drugs through differential pricing and stimulating local production and technology transfer. But most of these measures were expunged from the final version at the insistence of the United States, which saw them as a menace to intellectual property rights in pharmaceuticals.

The ultimate joke would be if civil liberties are sacrificed in the fight against terrorism, as a lack of civil liberties seems to be a main cause of terrorism around the world. Support for civil liberties should be part of the arsenal in the war against terrorism, both at home and abroad.

Thus, by focusing on caps as a solution...

· The insurance companies and their supporters are diverting the public’s attention away from long years of mismanagement by an industry that continually allowed actuarial prudence to take a back seat to marketing strategy.

· The insurers, insurance regulators and insurance legislators are avoiding a much-needed post- mortem on what really went wrong in the property and casualty industry in general and in the med mal sector in particular. Was it prudent to rely so heavily on investment income while underwriting income stayed chronically in the red? Did industry decision makers get caught up in the stock market euphoria like nearly everyone else?

· Worst of all, many companies and legislators are using the insurance crisis opportunistically to push tort reform. However, tort reform, to be productive, merits more pondered and balanced debate based on its own merits, independent of the insurance crisis.

. . . Investigations into Angola's finances suggest that a third of the oil revenues received by public bodies - about $1bn - have gone missing every year for the past five years, according to Global Witness, a non- governmental organisation. Similar allegations have emerged in countries such as Equatorial Guinea and Kazakhstan, two up-and-coming oil producers.

This has not been lost on the growing band of ethical investors who worry about reputational risk to the companies in which they invest. "In too many cases, payments go missing and end up fuelling corruption, poverty and conflict," says Karina Litvack, head of socially responsible investing at ISIS Asset Management, the UK fund manager. Pressure groups have targeted, among others, Unocal and TotalFinaElf in Burma, Royal Dutch/Shell in Nigeria, ChevronTexaco in Angola, and ExxonMobil in Aceh and Equatorial Guinea.

. . . Publish What You Pay has called on stock market regulators in developed countries to include payment transparency in companies' listing requirements. "Privately, all companies admit that corruption is a major business risk for them but very few have stuck their head above the parapet," says one UK-based institutional investor.

. . . Corruption in developing countries is a facet of what economists describe as the "resource curse" - whereby abundant natural resources hinder rather than help development. A recent study by Christian Aid shows that poor oil-dependent countries are more likely to suffer from corruption, poverty, war, and dictatorial government. And international companies continue to struggle through a jungle of corruption they are inadvertently helping to sustain.

John Casesa, analyst at Merrill Lynch, said: "May's demand suggests a sluggish spring selling season. The key conclusion remains that industry conditions are not stable - they are deteriorating." Manufacturers are also worried about falling used vehicle prices, which make it harder to recoup the value of vehicles that are sold on the open market when they are removed from rental fleets.

One of Mr. Bush's aides said today that the United States was "virtually alone now as an engine of growth in the global economy," though in the period before the opening session today Mr. Bush's aides talked about no new global initiatives to synchronize get the three largest world economies in sync. That was the traditional purpose of this annual meeting, though one that has often gotten lost with the other competing agendas. "If they deal with trade, exchange rates, and Iraqi reconstruction in an acrimonious fashion, that is likely to be very unsettling for the dollar and thus for the financial markets," said Robert D. Hormats, a veteran of many of these economic summit meetings and now the vice chairman of Goldman Sachs International. But those are also the issues that least invigorate Mr. Bush, who sees these meetings largely as a forum to press his case for the fight against terrorism, and to argue, as he did at the beginning of his trip this weekend, that the world must unify behind an American vision of confronting tyrants and unconventional weapons.

Three young legal scholars have created a sensation in Chinese intellectual circles with a modest proposal: to enforce personal rights that are guaranteed in the Constitution, starting with the protection of downtrodden migrant workers in the cities. In a petition to the national legislature that has drawn unusual attention and praise in the news media, the scholars challenge the system by which big-city police officers detain, fine and expel rural migrants at will, with no judicial oversight.

The petition, which was submitted last month, followed a national outcry over the unexplained beating death of a man detained in the southern city of Guangzhou. But the drafters had larger goals in mind when they described the system as "inconsistent with our country's Constitution and laws," and they argued that as citizens they could ask the legislature to revoke it. "We hope that by taking up this smaller, concrete issue, we can advance the cause of constitutional rights in general," said Xu Zhiyong, 30, a law professor at Telecommunications University in Beijing and an author of the petition.

A new study by groups critical of the tax law that President Bush signed on Wednesday has found that 8 million mostly low-income taxpayers will not receive any benefit from the law. Republicans have said for weeks that the new tax law was designed to benefit all those who pay income taxes.

Mr. Chirac is expected to say [at a G8++ meeting] that the wealthiest nations must increase their spending for education, health care, water and farming, and that they must help restructure government institutions and encourage free investment in the poorer regions of the world.

Lobbyists for the drug industry are stepping up spending to influence Congress, the states and even foreign governments as the debate intensifies over how to provide prescription drug benefits to the elderly, industry executives say. Confidential budget documents from the leading pharmaceutical trade group show that it will spend millions of dollars lobbying Congress and state legislatures, fighting price controls around the world, subsidizing "like-minded organizations" and paying economists to produce op-ed articles and monographs in response to critics. The industry is worried that price controls and other regulations will tie the drug makers' hands as state, federal and foreign governments try to expand access to affordable drugs. The documents show that the trade association, the Pharmaceutical Research and Manufacturers of America, known as PhRMA, will spend at least $150 million in the coming year.

The president of the teachers' union in Miami-Dade County, Fla., is under federal investigation, union officials said on Friday, after reports that he had spent $350,000 in union money on a way of life that included $175 python-print pajamas from Neiman Marcus and a $49,715 three-week vacation to Australia, New Zealand and California.

New baby formulas supplemented with fatty acids are being promoted as a way to bolster I.Q. and improve eyesight in infants. For formula manufacturers, including Abbott Laboratories, Bristol-Myers Squibb and Wyeth, the additives have become the latest weapon in the $3 billion market in the United States, where competition has grown more intense as mothers reject formula in favor of breast-feeding. The problem, say some parents and doctors, is that the additives may not do what the companies say they do, although their use could cost parents an additional $200 a year for formula. . . . Nevertheless, many parents, persuaded by intense advertising campaigns, are choosing to buy the new products.

HSBC on Friday fought off a shareholder rebellion over a controversial $37.5m three-year pay package for Bill Aldinger, the bank's new head of US operations. . . . One [shareholder] told the meeting: "I have nothing against Mr Aldinger but these US-style remuneration packages have no place in Britain. You have done a very dangerous thing and created a precedent and I bet all FTSE 100 executives are looking at their packages." [Another said] that HSBC should take a stand on the "US wages drift" of executive pay. "If HSBC does not take a stand, we will see it across the rest of the FTSE 100," he warned. Sir John defended Mr Aldinger's package. "In my judgment, the heart of this issue is how and whether an international company can acquire a business in the US, where remuneration practices and scales are different."

More than a third of Home Depot's shareholders signalled unhappiness with elements of the retailer's corporate governance on Friday, voting for a proposal to split the chairman and chief executive role held by Robert Nardelli.

Halliburton, the US oil-services company, is to pay $6m to settle about 20 shareholder class-action lawsuits over allegations of questionable accounting practices that began under the leadership of Dick Cheney, now US Vice- President.

According to the company, prosecutors are examining whether Schering-Plough illegally gave financial grants and other items of value to doctors and other customers, whether it marketed drugs for unapproved uses and whether it submitted false pricing information to the government so that Medicaid paid too much for its products. Most significant, lawyers said, was Schering-Plough's disclosure that a grand jury was weighing obstruction of justice charges. Evidence that the company sought to impede a government investigation could prompt prosecutors to take a tougher line against Schering in resolving any charges.

The allegations against Schering-Plough are the latest in a spate of investigations and lawsuits by private parties, state governments and the federal government focused on the pharmaceutical industry's marketing practices. The cases have been spurred by rapidly rising increases in the costs of prescription drugs and the burden those costs place on governments, employers and patients.

Under a proposal drafted by Governor. Vilsack and Gov. Jeb Bush of Florida, a Republican, states would accept some limits on the growth of federal Medicaid spending in return for sweeping new power to alter benefits and eligibility. Governors say they need the new power so they can avoid wholesale cuts in Medicaid, at a time when Medicaid costs are growing much faster than state revenues.

NPR's Robert Siegel talks with The Financial Times correspondent Peronet Despeignes about his article outlining a study which predicts a future of chronic federal deficits totaling at least $44.2 trillion. The study, commissioned by former Treasury Secretary Paul O'Neill, was meant to be included in the budget package -- but it was kept out of the final draft.

Warner-Lambert paid dozens of doctors tens of thousands of dollars each to speak to other physicians about how Neurontin, an epilepsy drug, could be prescribed for more than a dozen other medical uses that had not been approved by the Food and Drug Administration. The top speaker for Neurontin, Dr. B. J. Wilder, a former professor of neurology at the University of Florida, received more than $300,000 for speeches given from 1994 to 1997, according to a court filing. Six other doctors, including some from top medical schools, received more than $100,000 each.

Shareholders of Ingersoll-Rand, the industrial conglomerate, showed surprisingly strong support yesterday for the idea of bringing the company's official headquarters back from the tax haven of Bermuda. At Ingersoll-Rand's annual meeting, a proposal that the company reincorporate in the United States received 41 percent of the votes cast. Though a company spokesman called the 59 percent opposition a reaffirmation of the decision to incorporate in Bermuda, representatives of shareholders said it should cause the company's directors to reconsider the move.

The Competitive Enterprise Institute and Consumer Alert today filed suit challenging the more stringent fuel economy standards issued recently by the National Highway Traffic Safety Administration (NHTSA) for light trucks and SUVs. The groups will argue that NHTSA failed to adequately consider the impact of its new standards on traffic safety. The new standards, issued on March 31, will take effect beginning with the 2005 model year. NHTSA claims the new standards will not lead to vehicle downsizing, but CEI and Consumer Alert contend that the agency is ignoring the fact that higher fuel economy standards inevitably restrict vehicle size. Because larger SUV models have better safety records than smaller ones, a downsizing effect would result in more traffic deaths.