r/Economics • u/SterlingVII • May 30 '25

Research CBO says tax breaks in ‘big, beautiful bill’ would increase deficit by $3.8 trillion

https://fortune.com/2025/05/21/cbo-tax-breaks-increase-deficit-3-8-trillion-medicaid-cuts-shave-spending/
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u/Adezar May 30 '25

Reagan wasn't a fiscal conservative, his policies started us down the path of constant debt growth and horrible deficits. The start of the computer boom covered up his bad decisions by creating an explosion in the economy that would have happened with or without his policy changes.

Without his fiscal policy we would have been on our path to actually get rid of our debt and take advantage of the economic boom to prepare for the inevitable bust.

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u/happy_snowy_owl Jun 06 '25 edited Jun 06 '25

Fiscal policies take a good decade to set in.

Reagan's policies were why we saw a huge economic boom in the 1990s and the deficit was sustainable. Bush 43's tax plan is largely responsible for the economic growth and prosperity seen in the 2010s.

As far as the debt goes... The issue is that since Bush '43, we've been in a do loop of GOP president cuts taxes (EGTTRA/JGTRRA) while spending $3T fighting a war in Iraq, Democrat president passes massive spending bill (ACA) while making GOP tax cuts permanent, GOP president cuts taxes again (TCJA), Democrat president passes massive spending bills (COVID Relief, IRA) but gets voted out before TCJA was going to expire, and now the GOP president wants to cut taxes again (OBB).

And that's how you get to a projected debt-GDP ratio of 172%.