Source: Calculated Risk via Talking Points MemoYet despite the fact that the employment situation in America is still bleaker than it has been in decades, the conservative establishment has convinced citizens that our greatest fear should be the federal debt.
Gosh. It's really late at night, and this graph is hurting my tired eyes. Isn't it scientifically true that there are only three ways to reverse a federal debt; raise taxes, cut spending or invent some unprecedented technology that creates lots of jobs?
ReplyDeleteClinton's presidency is accredited for the wonderful economic boom during the 90's. Do you think that the fiscal surplus enjoyed during those years is related to Clinton's decision making and overall character as president or was it due to some other factor unrelated to Clinton?
The debt can be reduced by either raising taxes, cutting spending or economic growth that causes tax revenue to increase. Clinton used a little bit of each to turn yearly deficits into surpluses. Upon taking office, he worked with Congress to raise the marginal tax rate for high-income earners. Later on, cuts to defense spending (made possible by the end of the Cold War) and social spending (related to the 1996 welfare reform law) were enacted. Equally important, however, was that Clinton got lucky and presided over a period of rapid growth fueled by the technology sector. So the budget surpluses weren't entirely his doing, but his management of the federal budget was the most responsible that the nation has seen in quite a while.
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