Why 1970--when nothing happens to derange either the pattern of deficits as a share of GDP or the trajectory of the debt-to-GDP ratio--rather than 1980, when the election of Ronald Reagan does change the pattern of deficits and the trajectory of the debt-to-GDP ratio?Something that I'm amazed at is the success of the idea that the prosperity of the second half of the 1990s simply doesn't count. Yes, of course, some of it was unsustainable. All of it? Nope. And you know what? It existed, regardless. Unless one believes that subsequent policies were ideal -- does anyone? -- then it's very hard to say that it was responsible for the problems of the early 2000s. Let alone the recession beginning in 2007, or the crash in 2008. And if it wasn't responsible for those problems, then whose to say we shouldn't count the good times as, well, good times? I mean, yes, some people thought they were richer than they really were, or would be, because they had paper gains in the stock market that would never be realized (although some people, of course, did realize those gains). But people were also working, producing goods and services and getting paid for them, all of which made them individually and the national as a whole more wealthy. That's real, not phony.
Why speak of the late 1990s only as the era of the dot-com boom (which makes about 1/4 of the difference for the deficit) rather than the era of Clinton tax increases and spending cuts (which make about 3/4 of the difference for the deficit)--both of which were very hard-fought and hard-won, and then casually trashed and reversed by George W. Bush and his Republicans in the early 2000s?
I read this, and I sense--from Thornton and Taylor--a willful denial of a lot of the past generation's American economic history.
Hmmm...I think I'll sneak something else in here at the bottom. Steve Kornacki had a history of GOP tax monomania the other day which was mostly excellent, but I do have one small quibble (surprising, because he's extremely reliable on this sort of thing). Anyway, it doesn't really matter to the main point he's making, but he conflates old-fashioned Eastern Establishment Republicanism with opposition to post-1978 GOP tax policy, so he winds up saying that of the 1990 budget fight: "At the time, the top Republican in the Senate (Bob Dole) and the top Republican in the House (Bob Michel) were also Eisenhower-types who’d never been comfortable with supply-side." I don't think so. The key here is that the old split was between Taft Republicans and Ike/Dewey Republicans, and it was the Taft side that really cared about budget deficits -- and while they were certainly anti-spending, they were not anti-tax. In other words, they were real deficit hawks (and got made at Ike when he supported deficits). I'd classify Dole, certainly, and probably Michel too as solidly on the Taft side of that divide. The supply-side idea, and the fixation on low taxes in general, should be seen as a movement within the conservative side of the party, not one separating conservatives from Eastern Establishment types.
Anyway, back to economic and budget history: nice catch!