Keith Hankin: "Alleged Reagan deficits". Everything you asked and more:
I thought your question was important and deserved a better answer. Here are all the details from the US Budget office, picked up at the Reagan home page:
reagan.webteamone.com
First, the deficits:
reagan.webteamone.com
Budget Myths
President Reagan entered the White House with an attitude of working honest deals with the Congress on spending. He wanted more defense spending, lower entitlement spending, lower tax rates which would boost the economy (and thus revenues) and seemed to achieve that agreement with Congress in both 1981 and 1982. However, despite getting concessions on taxes, congress never once cut spending, and the actual budgets were higher than what Reagan asked for 7 out of 8 years. This attitude of "cut spending later" helped continue the debt trends that began under Ford and Carter. By the end of Reagans terms, debt had increased by $2 trillion.
We've all heard the myth: President Reagan asked for far more spending than congress wanted and/or congress actually spent less than what Reagan asked for...yet the truth once again tells a different story.
Sources:
Budget Message of the President, FY's 81 to 89
Budget of the United States, FY 1993, Part 5, Table 1.3, page 5-18.
Proposed outlays for 1981 from 1981 FY 1982 Budget Revisions
Federal Budget Outlays
Proposed (Reagan) and Actual (Congress) and Differences
..........Proposed.....Actual..................%Difference............
Totals....7,357.6......7,554.9...................Avg 2.8..............
So there you have it. On average, Congress spent 2.8% more than Reagan asked for, while the cumulative (yearly compounding rate) was a whopping 24.5% more. If the budget in 1989 had been 24.5% smaller (i.e., 280 billion dollars) there could have been a surplus of about 130 billion dollars instead of a deficit. This is equivalent to a constant compounding increase of 2.8% every year during the 8 budgets above and beyond the previous year's spending. Whomever thinks that is not a significant amount should ask themselves whether a balanced budget in 1989 would have been significant.
If the cumulative column is not clear, visualize it as the acceleration of spending beyond what Reagan asked for. A 10% increase each year beyond what he asked for, for example, compounds to 1.1^7, or 1.95, which is 95% more, as opposed to 1 + 0.1*7 = 1.7, or 70% that some would say is the correct figure. In other words, each increase carries with it the excess spending from the previous year(s). It's also the same kind of math that causes programs with mandatory spending increases, no matter how small, to balloon after a few years. It's called geometric progression. For a nice graph of such a function, look at the growth in U.S. debt since 1974.
See a visual representation of the differences in spending.
reagan.webteamone.com
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And here is proof that under Rreagan, the budget deficit DECREASED as a percentage of Gross National Product ( which is what counts ) because of increased tax revenues caused by previous tax cuts:
reagan.webteamone.com
Government Revenues, the Debt, and GNP: 1982-9
A nice comparison is the measure of the debt and deficit against our GNP, widely regarded as the best measure of our indebtedness. Because our revenues are tied to GNP (Note: we now use GDP, a slightly different measure) our relative indebtedness can be determined as a percentage of that figure.
Source: American Almanac, United States Budgets, et al.
GNP, Budget Deficits and Relative Change
In billions of dollars except percents
Year GNP Deficit %GNP Debt %GNP % change
1982 3130 127.9 4.1 1147.0 36.6
1983 3325 207.8 6.2 1381.9 41.6 5.0
1984 3688 185.3 5.0 1576.7 42.8 1.2
1985 3958 212.3 5.4 1827.5 46.2 3.4
1986 4177 220.7 5.3 2129.5 51.0 4.8
1987 4442 148.0 3.4 2354.3 53.0 2.0
1988 4771 155.1 3.2 2614.6 54.8 1.8
1989 5201 152.0 2.9 2881.1 55.4 0.6
As can be seen, the deficit spiked early, then declined sharply in the second term of Reagan's presidency. Our debt increased by about 20% (GDP) and 50% relative to the previous level, a far cry from the doubling, tripling, or quadrupling that some claim.
Note that since spending (in nominal dollars) has increased faster under Bush and Clinton than Reagan, liberals are falling back to the proper measure of indebtedness (as a % GDP) while trying to continue to attack Reagan solely on nominal dollar increases.
Find out what the current total debt is.
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