Center for Freedom and Prosperity Foundation
For Immediate Release
Monday, February 14, 2011
New CF&P Video Shows that Reagan and Clinton
Are Role Models for Restraining Domestic Spending
(Washington, D.C., Monday, February 14, 2011) A new video released today by the Center for Freedom and Prosperity Foundation (CF&P) demonstrates how it is possible to curtail the burden of government. Entitled,”Spending Restraint, Part I: Lessons from Ronald Reagan and Bill Clinton,” the mini-documentary highlights the examples provided by two recent Presidents – both a Republican and a Democrat – to show that good fiscal policy is feasible.
Dan Mitchell, a Senior Fellow at the Cato Institute, explains in the video that the key variable is government spending as a share of GDP. This ratio shows the burden of government relative to the productive sector of the economy. By this measure, both Ronald Reagan and Bill Clinton successfully restrained spending and reduced the burden of government. Capping the growth of domestic spending was the key factor.
Inflation-adjusted domestic spending increased at an average rate of less than one percent per year under Ronald Reagan, a rate much lower than the rate of economic growth. As a result, the burden of domestic spending fell by 2.5 percentage points of GDP during the same period. Bill Clinton, meanwhile, was able to turn projected deficits into surpluses by holding the average growth of domestic spending to less than three percent, while also capitalizing on the peace dividend from the end of the Cold War. By the time Clinton left office, government spending had been reduced by more than 3 percentage points of GDP.
Unfortunately, all of the progress made under these two Presidents has been erased by the profligate spending of Bush and Obama.
“Thanks to reckless spending by Bush and Obama, the current fiscal situation is dire,” said CF&P Foundation President Andrew Quinlan, “but the solution is easy. We need genuine spending restraint like America enjoyed during the Reagan and Clinton years,” he added, “though it would be better if they actually cut spending.”
“America’s fiscal challenge is too much spending and deficits and debt are symptoms of that problem. This video shows that the only responsible approach is to limit spending, especially outlays for domestic programs,” said Dan Mitchell of the Cato Institute. He concluded, “Since there have been successful Presidents from both parties — as well as unsuccessful Presidents from both parties — this is not a partisan issue.”
Ronald Reagan and Bill Clinton both reduced the relative burden of government, largely because they were able to restrain the growth of domestic spending. The mini-documentary from the Center for Freedom and Prosperity uses data from the Historical Tables of the Budget to show how Reagan and Clinton succeeded and compares their record to the fiscal profligacy of the Bush-Obama years.
CF&P Foundation has also released more than three-dozen mini-documentaries since 2007. These videos include Tax Competition Primer, VAT-Hidden Tax, Global Flat Tax Revolution, Cutting the U.S. Corporate Income Tax, Promoting Prosperity, Obama’s So-Called Stimulus, Obama’s Deferral Proposal, Case Against Class-Warfare Tax Policy, President Obama’s Dishonest Demagoguery on Tax Havens, Six Reasons Why the Capital Gains Tax Should Be Abolished, The Rahn Curve and the Growth-Maximizing Level of Government, a three part series on the Benefits of Tax Havens and a another three-part series on the Laffer Curve.