In Reply to: Speaking ill of the dead posted by Carol on June 07, 2004 at 06:46:28:
Carol,
You said:
"It helps that President Clinton was a fiscal conservative who managed to hold down spending while economic growth caught up with the deficits
created by tax cuts."
Actually, that's a common misconception about the effect of tax cuts. If one uses a static model, then tax cuts appear to negatively impact income to the U.S. Treasury, but in fact, the opposite is true.
When individuals and business have more disposable income (thanks to a tax cut) they spend and invest. Such increased economic activity generates more taxable income, resulting in an increase in tax revenue to the government. This economic stimulation is known as the multiplier effect.
Reagan's tax cuts not only stimulated the economy, they were responsible for a 50% increase in tax revenues!
"But wait," you say, "those tax cuts caused a huge deficit." Nope, both houses of congress, which were controlled by the Democrats, saw all that money and went on a spending spree, spending about $1.63 for each dollar in tax revenues!
In his second term, Reagan agreed to sign a big tax increase that the Dems urged. They promised Reagan that if he signed it, they would stop their spending spree. They broke their promise.
After Carter's disasterous term, we had double-digit inflation, unemployment, and interest rates that reached 18%. Thank goodness the voters had the sense to elect Reagan by a landslide twice. He turned the economy around with his monetary policies.
By the way...I voted for Jimmy Carter the first time, but I didn't repeat that mistake.