Why did we reduce the tax rate during Bush administration while we were doing so well with a balanced budget?

During the mid to late 90's there was an economic boom known the dot com boom. Any IPO that sounded 'techy' or have anything to do with the internet would get gobs of investors. This dramatically overrinflated the market which saw to lots of temporarily high paying tech jobs and people getting lots of income from cashing in private stock during these IPOs. This lead to record high tax returns to the government, which combined with the republican congress which prevented Clinton from getting the spending packages he requested in budgets lead to a temporarily balanced budget. This crashed in 2000.

After the crash tax returns slumped. Once again leading to deficits. Interestingly enough, Alan Greenspan openly speculated that the economy needed a 'housing boom' to counteract the effects of the dot com bust. Some shenanigans later the housing boom busted in 2008.

Well there still would have been increased defense spending to deal with the war in Afghanistan, but it would have been considerably less.

Why are we doing the same thing again, its political. I mean, there are plenty of republicans out there that do believe that lowering taxes and increasing defense spending will benefit the country as a whole, and some even believe that the losses will be recouped through what is referred to as "dynamic scoring", where a lowering of taxes will actually increase tax revenues.

I don't feel like explaining that economic mechanism, but wiki the "Laffer Curve" for a full explanation.

Basically though none of that's going to happen. All its going to do is balloon the deficit.

>and choose not to lower taxes and raise spending.
This is false. I will agree he chose not to lower taxes, but all his budget requests would have dramatically increased spending. This was prevented by a republican controlled house. This was when Newt Gingrich and the republicans came to power in the house in 94 after decades of continual democrat control.

Just no.

I'm checking the wikipedia pages of federal budgets since 2000. And between 2000 and 2007 revenues don't change that much. And before 2000, Clinton government was giving out surplus even with up to 500b lower revenue in 1997. So that is not the reason.

I'm against the rat race, not against civilisation. The way I see it the pay to play Republic is a failed idea because those willing to pay are almost inevitably guilty of a conflict of interest. Meanwhile, when you drag a meritocrat away from their job to be heard by a committee he just wants to get it done and be on his way. He doesn't care enough to have an agenda, he's just there to outsource his intelligence.

The meritocracy is superior to the plutocracy.

The strong economic growth that allowed for a budget surplus began in the early 1990s, and the dot com bubble didn't account for, and then wipe out five years worth of growth.

You might be right about that. It seems like this era corresponds to Republican controlled Congress.

But why don't the contemporary Republicans aim for a balanced budget? Why are they so populist? They weren't at the time.

Attached: Combined--Control_of_the_U.S._House_of_Representatives_-_Control_of_the_U.S._Senate.png (1399x706, 165K)

For the Clinton question look up the Republican revolution of 96. They had willie by the balls and he changed his budgetary tune IMMEDIATELY

Why do you care?

Dude, the effect of the bubble burst on revenue is negligible. From 2000 to 2007 revenue stays roughly the same, it doesn't shrink. Something went really wrong in that period for the deficit to grow so much.

And in my opinion the main culprits are reduced taxes and increased defense spending. Which is exactly what we're doing now. The question is why?

I like budgets.

Actually I kinda take this back. Bush era also had Republican congress, they did nothing to stop the growth of expenses. So the answer may not be the Republican congress.

That's what i was saying in response to the other guy.

And i agree that increased defense spending due to the wars in Iraq and Afghansitan was the major culprit at the time. Lower taxes contributed a fair share as well.

War dividend and tech boom.

Generally, Clinton was more moderate on spending bumps than his party as a whole. The republican controlled congress definitely moderated him further.

When i said that he choose not to increase spending, i meant to say that he didn't follow through on his campaign promises to bolster defense spending to promised levels.

See I guess so, now the next question is, why are we in this mess now? How do we get out?

As we've established, the tech boom didn't have a large or lasting effect on tax revenue.

FY 2010 - $2.16 trillion.
FY 2009 - $2.10 trillion.
FY 2008 - $2.52 trillion.
FY 2007 - $2.57 trillion.
FY 2006 - $2.4 trillion.
FY 2005 - $2.15 trillion.
FY 2004 - $1.88 trillion.
FY 2003 - $1.72 trillion.
FY 2002 - $1.85 trillion.
FY 2001 - $1.99 trilion.
FY 2000 - $2.03 trillion.
FY 1999 - $1.82 trillion.
FY 1998 - $1.72 trillion.
FY 1997 - $1.58 trillion.
FY 1996 - $1.45 trillion.
FY 1995 - $1.35 trillion.
FY 1994 - $1.26 trillion.
FY 1993 - $1.15 trillion.
FY 1992 - $1.09 trillion.
FY 1991 - $1.05 trillion.
FY 1990 - $1.03 trillion.

From 1990 to about 2000 the annual tax revenue for the federal government doubled. From 2000 to about 2010 the annual tax revenue went up a little but then also decreased and was relatively static only showing a modest increase in that 10 year period.

It is important to analyze the increase in federal tax revenue on a percentage increase basis rather than in absolute numerical terms because federal budgeting is done under a process known as Baseline Budgeting. This means that each year the next year's budget starts at the previous years budget and then a certain percentage is added on to it. So in order for tax revenues from 2000 to 2010 to keep pace with the percentage increase the US saw between 1990 and 2000, we would have needed to see an increase of about 2 trillion a year in 2000 to 4 trillion a year in 2010. We did not see that. What caused this was a a significant downturn in the economy relative to the 90's because the 90's had the dot com boom.

Of the current budget deficit? Responsible tax and spending policy. Its funny how Republicans have been bitching about the budget deficit and national debt for the past eight years, but once they gain power, they only worsen the problem.

Unfortunately the solution, moderate tax increases and spending cuts, are extremely unpopular in today's political environment.

>How did Clinton achieve a balanced budget during his term?
he didn't, they cooked the books by using all of the money set aside for Social Security to off set debt.

You need to cut 2008 and after a bit because those are outliers, there was a big financial crisis.

The revenue after 2001 drops because of Bush tax cuts. And revenue growth after than between 2003 and 2007 is basically 50% which is really similar to 1990 to 2000.

So I don't get your point.

The social security trust fund more than tripled under Clinton.
ssa.gov/oact/STATS/table4a3.html

I'm an idiot. I calculated it wrong.

>You need to cut 2008 and after a bit because those are outliers, there was a big financial crisis.
the boom bust cycle is normal for economies. Discounting them as outliers would distort the data beyond what really occurs in the real world.

The dot com bubble was not the reason for the economic growth in the 1990s. For one it occurred towards the end of the 90s, and the "bubble" aspect was not in GDP numbers, but in stock prices.
Of course the short recession did cause some overall GDP loss, as with any recession, but an insignificant amount when compared to what was gained over the decade.

You have to remove the biggest crisis since great depression if you don't have a decade of data after it.

Why are we trying to establish a pattern that includes the entire 2000s. We can see that the tax base under bush did not change dramatically, but grew at a moderate pace. Tax revenue initially fell under him because of the tax cuts, and that in combination with increased defense spending lead to massive deficits.

>So I don't get your point.
My main point is really at the end of my one long post. If the US really wants to control it's debt and deficits it must be done on the spending side not the revenue side. Start with getting rid of baseline budgeting, these built in budget increases, done without question, almost insure deficits ad infinitium. This is exacerbated by economic bust times, when political parties feel pressured to engage in some sort of fiscal stimulus, being it either increased government spending, or tax cuts.

The problem with the US deficit and debt is one of spending not revenue. All that being said, the US while the highest in absolute terms isn't really terrible on debt or deficit when you compare it as part of a percent GDP compared to other developed countries. The US is kind of middle of the pack.

FY 2018 (est.) - $3.34 trillion
FY 2017 - $3.32 trillion.
FY 2016 - $3.27 trillion.
FY 2015 - $3.25 trillion.
FY 2014 - $3.02 trillion.
FY 2013 - $2.77 trillion.
FY 2012 - $2.45 trillion.
FY 2011 - $2.30 trillion.

I hope this helps you.

Its not something that will spell the end of the union, but still a problem to be addressed. I believe about 4-7% of the federal budget is currently dedicated to paying interest on existing debt. That's a lot of money that could be used elsewhere.

Cutting costs is one side of the equation, but moderate tax hikes is the other.

This means the revenue is growing at a similar rate, not significantly different than 1990s. So the argument "revenues were growing faster in 90s" is not a valid one. The revenues grew pretty much at the same rate over the years, excluding tax cuts and 2008 crisis.

It's actually a pretty moderate amount of federal budget. But the reason deficit annoys me is because it's becoming the norm. US is expected to have a deficit for a long time. If US is to remain a strong country, we should have more control over our budget.

The federal budget in 1990 was approximately 1.25 trillion. The federal budget in 2017 was approximately 3.98 trillion. Even accounting for inflation did the US really need over a three fold increase in the size of the federal government?

The problem is spending.

>This means the revenue is growing at a similar rate, not significantly different than 1990s.
This is not correct. If we were to keep pace with the 90's on a percentage increase rate, which is what matter because the US federal government engages in baseline budgeting, by 2010 we would have needed approximately 4 trillion in revenue and by 2020, the US government would have needed 8 trillion in revenue. The doubling of tax revenue in a decade is a very significant change.

Do you fuckheads even know any history??
Reagan out spent the Russian building bombs, ICBMs, planes, subs, carriers, battleships, spy satellites ect. and we had military bases around the world filled with soldiers, sailors ect. All armed fed clothed on taxpayer money. On top of that all the little ShitHole countries that we were in were milking us for foreign aid to keep them there.
Cold war ended, wall down. End of milt spending, cut spending everywhere.
On top of that dot com boom as has been stated already.