Frosty Loc: Minnesota

From http://zfacts.com/p/318.html

National Debt Graph by President
Republican National DebtOct 24, 2014. When did the National Debt go crazy? Why? Who’s to blame? Where is the debt headed? Compared to the US economy, the national debt is smaller than it was after World War II. But, take a look at what could have happened if three presidents had balanced their budgets. [Email the Fact Card]

The National Debt: Voodoo from Wall Street
Oct 24, 2014. What if Reagan and the Bushes had balanced their budgets? How much lower would the debt be now? We’ll get to that shortly, but first, how did we get into this mess? This may just be the weirdest political tale you’ve every heard.

World War II cost a bundle, and the country started out in the Great Depression. It was flat broke. But Uncle Sam was popular and the country patriotic, and people were happy to lend him money. Compared to the size of the economy back then, the debt soon outstripped even today’s debt, and we won the war.

After the war, they started paying off the debt, and the economy (and its GDP) grew. And for 35 years the debt kept getting smaller compared to the GDP. When it was the smallest (as compared to GDP) than it had been in 50 years, Reagan was elected (1980) and vowed to shrink it even more drastically. But he had an odd theory: Cut taxes and the government would collect so much more money that he could spend more and still pay down the debt. Even before he was elected, George H. W. Bush called this “Voodoo economics,” and so it was.

The result, of course, was that the debt stopped decreasing and shot through the roof, as seen in the graph above. By 1987, even Ron Paul (who loved the tax-cut part) blurted out: “How is it that the party of balanced budgets, with control of the White House and Senate, accumulated red ink greater than all previous administrations put together?” And so it had. Starting with a debt of $1 trillion, in eight years Reagan raised it to $2.8 trillion. Even relative to the bigger economy, this was as bad as it had been 28 years earlier. (And no, the House did not do it to him. The budgets Congress passed were almost identical to what he asked for and on average a tiny bit more balanced.)

Why did he do it?
So how the heck did this happen to the guy that rode to office on complaints of an out-of-control debt that was as big as a stack of $1000 bills 67 miles high? How did he come to add another 128 miles to that stack?

Reagan took some economics in college, and he really did want to reduce the debt. But he got snookered by some Wall Street “economists” (mostly political journalists) who told him he could have his cake and eat it too. They came up with the brand-new theory, mentioned above, that said the government can collect more money by reducing taxes. Wouldn’t that be nice! That’s the supply-side economics that George H. W. Bush called Voodoo.

It was first tested by Reagan. Bush I tried and failed to undo the Voodoo, and Bush II reinstated it after Clinton. Altogether there were 20 Voodoo budgets. And every single time the debt not only went up, it went up faster than the economy grew — usually much faster. Before the Voodoo, 26 of the previous 35 budgets resulted in the debt shrinking relative to GDP. Reagan’s first budget was the turning point.

Debt: Total owed from past and present borrowing. Deficit: This year’s borrowing.
Of course some supply-siders noticed this too, and when Treasury Sect. Paul O’Neil complained that cutting taxes would increase the deficit, V.P. Cheney just replied “You know, Paul, Reagan proved that deficits don’t matter.” In fact, many seemed to like the deficits and complain about them only when Democrats were in power. They saw them as helping to “strangle the government.”

So how big is this supply-side / Republican debt?
My answer is not entirely fair, because I calculate it by the Republican method, but it seems fair to hold them to their own standards. And it makes the calculation t***sparent and understandable. You be the judge. So just what is the Republican approach? There should always be a balanced budget — they even want to put that into the constitution. As Ron Paul said, they are the party of balanced budgets.

So we will ask, “What if Reagan and the Bushes had balanced their own budgets?” And what if Clinton and Obama had taxed the same and spent the same as they actually did?

The answer is that the National Debt would now be lower by $13.5 trillion! So that’s the Republican National Debt — according to their own standard of balanced budgets.

It’s quite easy to check these calculations (see this spreadsheet). They go like this: When Reagan took office the debt was $1 trillion. When he left it was $2.86 trillion. So $1.86 trillion for him. Then Bush-I added $1.55 trillion. Total so far: $3.4 trillion. Then Clinton took over.

Now the national debt is like a mortgage, and so the bigger it is, the more interest must be paid on it. Without the extra Reagan-Bush $3.4 trillion, there would have been a few hundred billion less in interest on the debt every year under Clinton. That interest adds another $2.3 trillion to the Reagan-Bush debt. Then Bush II increased it by $6.1 trillion to $11.8 trillion. And interest on that has been increasing the debt under Obama. The total Reagan-Bushes debt is now $13.5 trillion.

Screamin Scott Loc: Marshfield Wi, Baltimore Md, now Dallas Ga

Duckfart Loc: Olympia, Washington

Interesting perspectives from both. But both are perspectives that omit other real-world issues. The Reagan spending put the Soviet Union to the test in an arms race. The result--no more Soviet Union. What would you have paid for that?

user47602 Loc: ip 304.0.0.33.32

I guess our country's and our children's prosperity :roll:

Zophman Loc: Northwest

Pointing fingers might make one feel better about the issue. But in reality the issue has, and will, affect each of us. To me there are a few points I suggest we all consider:

1. Is "national debt" really that big of a deal?
2. If "national debt" is a big deal, what are we going to do about it?
3. Why should "I" care?

RixPix Loc: Miami, Florida

This mostly libertarian tripe. It was written to assuage the fears of tax increases of the wealthy while waving a f**g for the poor to see. When you wave a f**g, promote American p***e or Bless America the working stiffs in this country all feel good about themselves as the 1% drain thief lifeblood and bank accounts. It is an old tactic and it is used quite often as it works just read some of the posts on this board and you'll see people wishing and hoping for the good old days when we were number one all the while the back political candidates that have no real interest in their well-being.

Blurryeyed Loc: NC Mountains.

Delusional, and big government offers us what? More corruption, more crony millionaires? What does big government offer the common man other than more national debt and bankrupted programs with no future ability to pay for them? Just how much of our economy does our government deserve Rix? Currently Government spending, Federal, State, and Local is close to 45% of our GDP, how much more do you care to give to them? How much should we pay for the corrupted union contracts and the usless bureaucrats who would direct our every movement in our lives, make most if not all our major decisions for us through their regulatory powers.... How much of our treasure and our lives would you have us hand over to the government Rix? How much is enough for you sheeple?

Blurryeyed Loc: NC Mountains.

Nice fairytale, although it is true that republican presidents have run large deficits one must also look to the congresses that served along with them, president's can't set budgets, congress does that and it is very true that it was a republican congress that was most responsible for Clinton's balancing of the budgets, he saw the writing on the wall and conceded to the republicans allowing them to institute government reform that was long overdue.

rook2c4 Loc: Philadelphia, PA USA

The state of the National Debt has as much to do with Congress as it does with the President. Oftentimes, Congress will block a bill that could potentially lower the debt.

It's a bit like in sports, when the coach gets all the blame for a bad season rather than the team itself.

bvm Loc: Glendale, Arizona

Can you just imagine what it's going to be for the period of 2009 to 2015?

You are a lying figurer and you know it. Your dissertation was simply l*****t propaganda.

Frosty Loc: Minnesota

The spending, or arms race that took place which brought down the Soviet Union started long before Reagan. I attended a briefing back in the 60s where a government official working in intelligence said that forcing to USSR to spend money on arms instead of consumer goods was a part of their strategy to disrupt their economy. The downfall just happened to occur on Reagan's watch. It was going to happen sometime.

Screamin Scott Loc: Marshfield Wi, Baltimore Md, now Dallas Ga

I see, the fact that it happened on Reagan's watch is inconsequential then ?... I suppose the same can be said of the current Stock market under Obama ?, and what of the other successes he has claimed ?

bvm Loc: Glendale, Arizona

It's kind of like the demise of Ben Laden.
His demise just happened to occur on Obama's watch. It was going to happen sometime.
And now of course they're trying to say Hillary was an important part of that action.

idaholover Loc: Nampa ID

Back at ya!
http://www.heritage.org/research/reports/2001/03/the-real-reagan-economic-record


Your graph certainly illustrates Obama's ineptness while still blaming someone else!

Frosty Loc: Minnesota

Please explain what about it is a fairy tale.