"This is why the deficit jumped under the last two tax-cutting presidents (Ronald Reagan and George W. Bush) and fell under the last two tax-raising presidents (George H. W. Bush and Bill Clinton)."
This is not entirely true and is misleading in any case.
After the Reagan tax cuts took effect, the federal deficit fell in nominal and real dollar terms, and as a percent of GDP. It only rose in his first two budget years, before the tax cuts hit, because of recession and rebuilding Jimmy Carter's weakened military.
Bush 41's deficit was essentially flat - if anything, a little larger at the end than the beginning.
Clinton's did shrink, but it is dubious, at best, to attribute that to tax hikes. For one thing, Clinton cut capital gains taxes. More importantly, his budget benefited greatly from the so-called "peace dividend" of military cutbacks after the collapse of the Soviet Union.
Bush 43, meanwhile, saw rising deficits before his tax cuts took effect, first because of the recession he inherited and then because of the slow recovery and post-9/11 military spending. His tax cuts finally took effect in FY2003. Deficits rose only a little in 2004 and then fell roughly in half relative to GDP through 2007. |
