Quote:
Originally posted by Spanky
How can you say this with a straight face. First of all, the cuts would have been bigger if Clinton had not opposed them. The growing economy was the biggest factor in balancing the budget. Then the fact that the Repubs were able to stem government growth.
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Let me lay out some raw material and see if it holds up given this hypothesis.
Here are some figures for 1992 and 2000, the beginning and end of the Clinton Administration. Everything is taken from historical governmental statistics and is in billions of dollars.
1992:
GDP 6,240
Government Receipts: 1,091
Receipts from Individual Income Taxes: 476
Receipts from Corporate Income Taxes: 100
Government Outlays: 1,381
2000:
GDP 9,708 (up a bit more than 50%)
Government Receipts: 2,025 (up by almost 100%)
Receipts from Individual Income Taxes: 1,004 (up more than 100%)
Receipts from Corporation Income Taxes: 207 (up more than 100%)
Government Outlays: 1,788 (up about 30%)
So, government outlays grew more slowly than GDP (30% versus 50%) while government income grew much faster than GDP (100% versus 50%). Income taxes as a percentage of governmental receipts grew somewhat.
OK, this tells me that the level of deficit reduction that occurred depended very heavily on the tax component. It also tells me that government grew more slowly than the economy, which is a general victory for those desiring a smaller government.
As I said, I'm not an economist and I'm sure there are dynamic forces, and I'm also sure that some might have cut more or raised less, but I think it is very hard in these numbers to see room for the scale of deficit reduction that occurred without the tax component. The statement that "the growing economy was the biggest factor..." does not appear right, because governmental receipts grew much faster than the economy, and this differential makes up a very large part of the surplus.
Indeed, had governmental receipts grown at the same rate as the economy, about 50%, there would have been no surplus and the economy would have continued in substantial deficit.
