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POST SOVIET UNION TO CLINTON and BUSH (2 of 3)

Before becoming Reagan's vice-president, George Herbert Walker Bush had called Reagan's economics, "voodoo economics." As Reagan's vice president he was a good Republican team player, and when he accepted the Party's nomination for president in 1988 he told the delegates, "Read my lips: no new taxes." Recession arose during his administration. The deficit grew and Bush felt obliged to raise taxes. Many ideological Republicans were outraged, including Grover Norquist and House Whip Newt Gingrich. Gingrich claimed that Bush having raised taxes destroyed for years to come the Republican Party's most potent election plank.

President G. H. W. Bush came close to a balanced budget, but he did not raise taxes enough to successfully combat a rising national debt. When he left office in January 1993, the national debt as a percentage of GDP was higher than when Reagan left office. Some of the money involved in the national debt was owed to foreign governments. The nation was spending more in dollars buying from abroad than it was selling abroad. Businesses and the Reagan and Bush administrations were looking toward economic help from consumers. Consumers in the U.S. were being encouraged to buy rather than to save and practice frugality.

President Clinton

Conservative rule was interrupted in 1993 following the election of Bill Clinton. Clinton and his economic advisors were not fans of supply-side economics. Clinton signed into law one income tax increase, in 1993. It created tax rates of 36 percent and 39.6 for individuals and a 35 percent income tax rate for corporations. A booming economy, produced in part by the new demand for computers, increased tax revenues substantially, and by 1997 there was a budget surplus of less than one percent of GDP.

Clinton left office with a budget surplus of 2.4 percent of GDP -- after having cut military spending by that same amount. And the National Debt during the Clinton administration dropped.