Quote:
Originally posted by Mmmm, Burger (C.J.)
I still don't see you explaining what deficits have to do with this. If cutting taxes would increase growth, why not do it when we're running a surplus too?
And here's the graph on which I made my historical claim. I think it tends to undermine G3's assertion, given the falling levels of debt means teh country was running a surplus.
and adjusted for GDP (which makes it look even better, because of GDP growth):
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If you parse through the data, there was a strange, fascinating and wholly anomolous period in the economy from 1870 through about 1910 where I think you are right - deficits were uncommon and Congress balanced many a budget; a good part of this has to do with the growth of the West, and the presence of large amounts of revenue from land sales. In other words, it was difficult to spend all they had, especially given their conceptions of government's role.
The first 50 years of the country's history are very different, with a lot of debate on government financing of canals and railroads (or railroad right of ways); there are regular deficits in the period, significant new forms of debt develop, and the municipal finance industry is born. Even with a lot of the burden shifted to the states (there are some very good books on the financing of the Erie Canal), the federal government debt does an accordian act throughout these 50 years, and a big limit on it is the government's credit worthiness.
Then, there's that period from Jackson through the civil war, where we fight some small wars, do some more modest projects, and get ready for the coming storm. These are also accordian years, but not on the grand scale of the first 50. And Jackson is a great case study - he's quite frugal in the early years, yet by the time of what is often called his third term (e.g., Van Buren's term), the Jacksonians can spend with the best of them.
But in terms of Congress spending more than it has (taking into account commitments on debt, too), I think you'll find the only anomoly to be the gilded age. Other than that, our elected officials have generally had considerable trouble restraining themselves.
