Posted 8:04 PM by Robert

Some Basic Questions

The Bush tax and budget proposals are stirring up old questions about the past Reagan/Bush era deficits - especially in regard to whether the deficits that the new Bush proposals might produce are "responsible." Silly, partisan ranters such as Paul Krugman and Brad DeLong, have had their say. But it is not really that easy (at least for me) to get a feeling for what the general educated public really thinks about those old Reagan/Bush deficits, especially whether the deficits were worth it. Those deficits were certainly assailed as "irresponsible" in their day. Do most educated people think that is true? And what do people remember?

For example:

Do most people think that the Reagan/Bush deficits were "caused" by increased defense spending (or by such spending combined with the Reagan tax cut) that was instrumental in bringing the Cold War to an end?

Do they think the Reagan tax cuts were a major cause of the prosperity of the 1980's?

Do they think that ending the Cold War was a major "cause" of the prosperity of the 1990's - at least to the extent that prosperity was real and not a bubble?

Do they therefore think that the Reagan/Bush deficits "caused" much of the real prosperity of the 1990's through this mechanism?

Or do they think that the Reagan/Bush deficits were bad, and the resulting government debt overhang was just one more thing for the economy to overcome?

If so, what do think about the national dialogue going so fast from fear of the effects of deficits to fear of the effects of repaying the federal debt?

Do they think that a large part of the Reagan/Bush deficits were "caused" by expenditures needed to cure the Savings & Loan crisis?

Do they think that a large part of the reduction of the deficit under President Clinton was "caused" by the end of the Savings & Loan crisis, which actually started to flush cash back into the federal government?

Do they think that a large part of the prosperity of the 1990's was "caused" by curing the Savings & Loan crisis - thereby avoiding the "walking death" that has plagued Japan for more than 10 years?

Do they therefore think that the Reagan/Bush deficits "caused" much of the real prosperity of the 1990's through this mechanism?

Or do they think that Clinton administration policies or the policies of the post-1994 Congress "caused" the real prosperity of the 1990's?

For example, do they think freeing up international trade or the Clinton tax rise of 1993 gave the economy a big boost?

Do they think anything government did mattered that much?