Quote:
Originally Posted by GenuineRisk
Reagan 'fixed' the economy by tripling the entire pre-existing national debt. Anyone can live high off the hog for a while if they don't mind going into serious debt. Well into his second term, Reagan was still cheerfully predicting that revenue boosts from his tax cuts would pay for the debt. There was a modest increase in revenue but it didn't even pay the interest on the new debt."
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That's actually not quite true. Reagan did cut the income tax rates, but the revenue collected actually tripled by 1989. So there was more money coming in.
However, the government (Reagan AND the Democratically held Congress) outspent the new higher revenue level, resulting in higher yearly deficits and accumulated national debt.
They are two separate things, and the conclusion would be easier if the revenue went down by slashing tax rates, but that's not what happened. More money left tax sheltering for investments, creating jobs (here then as opposed to abroad) and boosting the economy. But we did try to win the Cold War so military spending went up, social spending has never gone down. It all adds up.
It was a net negative but not due to loss of revenue - the spending exceeded the increased revenue resulting in a shortfall. Like most years except 1969 under Nixon and that is not a good thing.