March 9, 2001 02:41 PM | Permalink | 
The Facts:
As everyone knows, under Ronald Reagan, the federal budget deficit ballooned–growing from 2.7% of the Gross Domestic Product in fiscal 1980 to 5.0% of the GDP in 1986. (The deficit actually peaked in 1983, at 6.0% of the GDP, before some of the Reagan policies began to be reversed.). Here’s how that happened:
Changes that lowered the deficit (as shares of GDP)–
Domestic appropriations. Fiscal 1980: 4.7%. Fiscal 1986: 3.3%. Change: -1.4%
All other non-defense programs, from fiscal 1980-86. Change: -0.2%
Non-income-tax revenues (mostly payroll taxes), from fiscal 1980-86. Change: +0.5%
Net deficit-lowering changes: -2.1%
Changes that increased the deficit (as shares of GDP)–
Defense spending. Fiscal 1980: 4.9%. Fiscal 1986: 6.2%. Change: +1.3%
Personal & corporate income taxes. Fiscal 1980: 11.3%. Fiscal 1986: 9.3%. Change: -2.0%
Interest on the national debt. Fiscal 1980: 1.9%. Fiscal 1986: 3.1%. Change: +1.2%
Net deficit-increasing changes: +4.4%
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