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**gooseCile** · 03-17-2006, 01:10 PM

I guess. I just find it hard to understand how, within 5 years, a government can go from a surplus (or at least fairly balanced) budget to the highest defecit in history for 2 years running, and more projected.

That's because Clinton's balanced budget in his last year was a 'one-off' occurance - not the product of measured policy, but rather a bonus due to the huge jump (temporary) in capital gains tax revenues from the dot-com-bubble-boom of the late 1990's.

The following year, capital gains tax revenues returned to 'normal' and thus the balanced budget slipped into deficit. Bush's massive tax decreases and massive spending increases did the rest of the damage since. Most reputable non-partisan studies have concluded that it was the tax cuts specifically rather than the spending increases that have done the most damage to the US fiscal position here. Unfortunately, 'supply-side' theory doesn't actually work.

03-17-2006, 01:10 PM	#23
gooseCile Join Date Oct 2005 Posts 563 Senior Member	I guess. I just find it hard to understand how, within 5 years, a government can go from a surplus (or at least fairly balanced) budget to the highest defecit in history for 2 years running, and more projected. That's because Clinton's balanced budget in his last year was a 'one-off' occurance - not the product of measured policy, but rather a bonus due to the huge jump (temporary) in capital gains tax revenues from the dot-com-bubble-boom of the late 1990's. The following year, capital gains tax revenues returned to 'normal' and thus the balanced budget slipped into deficit. Bush's massive tax decreases and massive spending increases did the rest of the damage since. Most reputable non-partisan studies have concluded that it was the tax cuts specifically rather than the spending increases that have done the most damage to the US fiscal position here. Unfortunately, 'supply-side' theory doesn't actually work.
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