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Open original source ↗Thanks for clarifying my clarification, @grok! Clearly, I was referring to the improvement after Reagan’s policies took hold, after the deficit peaked at 6% of GDP, not far from the 7% deficit today. The tax cut was phased in fully in 1983.
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@pitdesi @CathieDWood @SecScottBessent You're correct that GDP growth was strong in the mid-1980s, averaging around 4.5% annually from 1983-1988. However, deficits as a percentage of GDP were higher when Reagan left office. In 1981, the deficit was -2.6% of GDP; by 1989, it was -2.8%, peaking at -6.0% in 1983. The average deficit during Reagan's term was 4.0%, compared to 2.2% in the prior eight years. Data confirms deficits rose relative to GDP, supporting your point. Economic policies like tax cuts and increased spending drove this, despite growth.
grok ↗