Reagan massively outspent Clinton. He increased the deficit every year...Clinton lowered it.
I never gave Clinton credit for keeping inflation low. Although, if you want to get into that, you can of course talk about the Deficit as it relates to GDP since it DOES have an effect on inflation and the value of the dollar.
Of course, Reagan outspent Clinton, that's apples & oranges. Tip O'Neill & others made it absolutely clear that there was no way they were going to approve huge defense increases while at he same time voting for huge domestic spending cuts. On this point no amt. of presidential persuasion would change their minds (according to White House domestic advisor, Martin Anderson). Reagan finally accepted the reality that if he wanted a big increase in the defense budget, he would have to leave domsestic spending roughly at existing levels. In a sense, Reagan reconciled himself to presiding over a large federal gov't as the price worth paying for his defense policy.
As a drop in the bucket, he was able to get $35 billion in domestic spending cuts by tying them to the package of across-the-board tax cuts. Congress reluctantly agreed to cutbacks in food stamps, Medicaid, public service jobs, housing subsidies, unemployment compensation, urban mass transit, student loans, and welfare. Of course, all his critics like O'Neill, Sen. Moynihan & Robert Reich protested that he was "soaking the poor to subsidize the rich".
These were the same critics who would subsequently blame Reagan for large budget deficits. (I already posted the deal Reagan mistakenly made w/Congress in that for every dollar Reagan would approve in tax increases, Congress would approve three dollars in spending cuts. As Ed Meese described it, the bargain turned out to be a ruse. Congress approved the tax increase, & Reagan signed it. "The country is still waiting for the spending reductions".)
The lesson Reagan learned as gov. of California - if you raise taxes, gov't will immediately find a way to spend the money - was painfully reaffirmed. Next, he established the Grace Commission to investigate waste & fraud in gov't which led to minimal lowering of the deficit b/c a substantial proportion proved politically untenable, b/c they required congressional approval which wasn't about to happen.
Eventually Reagan abandoned any serious effort to reduce domestic spending substantially. There arose a standoff between Reagan & the Dems. The Dems warned of escalating deficits & demanded that Pres. Reagan agree to tax increases & reductions in military spending. After being burned once, Reagan wouldn't agree to any tax increases. He insisted that the defense buildup, costly as it was, was vital to reverse the tide of Soviet expansionism.
Finally, I already addressed the deficit & how Gramm-Rudman legislation (though flawed) placed strict limits on deficit spending & sought to balance the budget by the end of the decade. As a result of economic growth & spending restraint, the deficit in the late 80s began to decline in both absolute terms & as a proportion of the economy. The deficit, which consumed 6.3% of the GDP in '83, shrank to around 3% during '87-'89, which is just where it was when Reagan first took office. During the 1990s, largely due to a continuation of the Reagan economic boom as well as huge defense savings resulting from the end of the cold war, the deficit fell so dramatically that the budget soon balanced itself.
Just ask Barney Frank & Daniel Moynihan. They were convinced that they had been victimized by an ingenious plot. They even accused Reagan & his aides of planning & executing a conspiracy to manufacture gigantic deficits & thus starve the gov't of future revenue. Of course, Reagan didn't pursue this as a positive good; he settled for them as a necessary evil under the circumstances. Clinton never had the kind of Congress (specifically the House) to deal w/ compared to what Reagan had. These jokers had been in power for decades & were fat & happy from tax & spending our hard earned bucks. You or Stonebreaker could've walked into Clinton's presidency (following Bush Sr.) and enjoyed its success w/ nary lifting a finger. Let Greenspan adjust the rates & put the rest on autopilot. What would be interesting would be to see what Clinton would have done following Jimmy Carter in regards to the woeful economy & the underfunded military.
