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Clinton, the centrist Democrat with a Republican Congress pushing him along, managed to curtail federal spending significantly and even cut taxes in 1997.
Neither Reagan nor George W. Bush were able to adequately control federal spending – hence their increased deficits. President Obama’s run-away deficits, of course, are leaving both Reagan and Bush in the dust. Unlike Clinton, Obama’s way of trying to control the deficit is solely to increase taxes, while his spending skyrockets ever upward with wasteful big government stimulus and new entitlement programs.
Comparing the economic records of Reagan and Clinton more specifically, the increase in real spending (i.e., after adjusting for inflation) during Reagan’s first and second terms were 14.5% and 7.4% respectively. The increase in real spending during Clinton’s first and second terms were 4.2% and 8.1%.
Economic growth during Clinton’s two terms and Reagan’s two terms were very close, with Clinton’s record slightly ahead – 3.58% annualized growth in gross domestic product versus 3.37%. But real disposable income grew faster on an annualized basis during the Reagan years than the Clinton years – 3.68% versus 3.49%. Clinton’s unemployment rate improvement per year was slightly better than Reagan’s – a difference of .13% (.0013).
In other words, the Reagan and Clinton economic records were both good, but reached through somewhat different paths. Reagan achieved his success primarily through across-the-board tax cuts. Clinton achieved his success primarily through federal spending curtailment.
What Krugman fails to grasp is that Obama is embarking on two disastrous paths at the same time – record increases in spending (producing record deficits) and higher taxes. No wonder the economy, after 18 months of Obama-economics, is in shambles.
