Sunday, October 30, 2011

Reagan spending

There is a lot of talk about the deficit and looking back we can see some interesting things if we compare the 8 Reagan years 1981 through 1989 and the 8 years of Clinton 1994 through 2001. During the Reagan years revenues increased by 6.1% per year and spending increased by 5.5%. During the Clinton years revenues increased by 5.9% but spending increased by only 3.1%. Reagan ended up with a deficit and Clinton with a surplus and the major difference was in spending. The reason for this is that Reagan for most of his time had a Republican congress who did not try to hold the line on spending but Clinton had a Republican congress which fought against spending.
More recently with George Bush and a Republican congress and Obama with a Democrat congress spending has sky rocketed. Since party trumps county no congress wants to spend money if the President is in the opposite party since they don’t want the President to get credit. It appears the country is better off when the President is in one party and the congress in the other party.

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