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Politics : American Presidential Politics and foreign affairs -- Ignore unavailable to you. Want to Upgrade?

To: DuckTapeSunroof who wrote (44209)	7/16/2010 6:11:11 PM
From: TimF	Read Replies (1) \| Respond to of 71588

The vast BULK of the Reagan/Bush I era federal deficits were in actual fact "STRUCTURAL" in that they existed entirely apart and outside of the normal business cycle fluctuations Cycles are not need or exact, and the long run rate of growth averaging out the cycles, that we will have in the future is not specifically known, so labeling particular parts of the deficit as structural or cyclical is not even remotely close to an exact science. But yes to the extent it can reasonably be determined a lot of those deficits where structural. And when Clinton had surpluses he still had structural deficits, the surpluses only existing in the context of a fairly high point in the general business cycle (combined with a bubble in tech stocks, which is not purely a cyclical issue). He also had quite a few non-cyclical benefits, that reduced his structural and actual net deficits. Those factors where together very large, and he would have had deficits every year of his presidency without them. They (best situation with congress in terms of reducing spending, the peace dividend / shrinking of the military, the large stockpile of new weapons systems bought by Reagan and Bush I, the tech stock bubble) are why Clinton faced the best situation for reducing deficits and achieving surpluses that any recent president has faced. In addition to the massive benefit for the non-cyclical reasons I mentioned, he also had tremendous cyclical benefits, having a strong upcycle, between two recessions just outside his presidency in either direction. Other recent presidents (lets say from Regan on) Reagan - Cold War still active. The US military's weapons systems where getting old, and our readiness levels were low. Deep Recession early in his time in office. Didn't have a great deal of support in congress for reigning in government spending growth in non-military areas. Bush I - Had some ability to realize more of the "peace dividend" than he did (instead he left a lot on the table for Clinton), which in purely fiscal terms he can be blamed for. But on the other hand he had a recession (not one of the deepest in recent decades but he only had 4 years to have any period of growth to overcome it), and again congress wasn't supporting reigning in federal spending. Bush II - Two recessions including one deep one. One of the more spendthrift congresses in modern American history. A military that had probably been shrunk too much by Clinton, so some expansion was necessary. 9/11 and Afghanistan as a response to it. Katrina. Also only had deficits above the modern American average in terms of percentage of GDP after Democrats had taken over congress. Obama - Financial crisis, deep recession, the baby boomers retiring, two wars left over from the last administration. He probably faces the worst conditions in terms of fiscal balance of any recent president, but then he is making the situation worse not better, with his vast increases in spending from short term (at least I hope the bailouts and stimulus efforts are short term) to long (most importantly so far a new government medical program). Clinton had a better cyclical situation than any of them, had more support for cutting spending than any of them, and with the possible exception of Bush I had a better situation in terms of being able to reasonably restrain military spending than any of them. Your only response to all of that is that when he came in to office the structural deficits where large. Well sure they would but he had 8 years and near perfect conditions to change that, as well as having an outstanding cyclical situation.