WHAT CAUSED THE DEFICIT: SPENDING OR TAX CUTS? As the GDP chart
shows, the percentage of taxes collected in the Reagan-Bush era
was exactly the same as the period for 1972-81, while spending
increased 2.0 percent. In the long run, it would appear that
runaway spending created our deficits. However, if you compare
the 80s with Carter's last budget, you find that Reagan and Bush
cut taxes 1.6 percent, but increased spending only 0.3 percent.
So, depending on how you measure it, you can blame either tax
cuts or runaway spending for the deficit. Carter's 20.2 percent
in tax collections for 1981 was unusually high for the 70s, the
exception rather than the rule. One could argue that it's better
to take the long-term view, and regard spending as the chief
cause of the deficit. On the other hand, if you take an even
longer-term view, you would find that general tax collections
have been slowly climbing over this century, probably in
response to the demands of an increasingly interdependent
economy. Carter's increase