Our politicians keep on saying that tax and spending cuts will increase jobs while raising taxes will raise unemployment. This has not worked in the past as seen during the last three presidents who served two terms -- Presidents Reagan, Clinton and Bush II.
Reagan made a drastic cut in taxes, bringing the top rate down from 49 percent to 28 percent while eliminating several tax benefits popular among middle class and seniors. After eight years in office, Reagan's budget deficit was more than all of the previous presidents combined together -- he doubled the national debt. Obviously, his deficit reduction plan did not work.
Clinton raised the taxes for those making more than $250,000 while increasing tax benefits for the middle class. The result was exactly opposite of what the supply-siders had predicted. The unemployment rate was the lowest in decades with booming economy. Although Clinton inherited a record deficit, he left the office with a record surplus.
When Bush inherited the budget surplus, he started handing out money to his wealthy friends. Even though he started two wars, he continued to give tax breaks. No wonder, within a few years Bush squandered away the entire surplus and left the office with a huge budget deficit and our economy in shambles.
Each of last 20 years (Reagan, Bush I and Bush II) of supply-side policy produced huge deficits.
On the other hand, eight years of Clinton turned the deficit into budget surplus. Yet, without any hesitation the supply-siders want continuation of the Bush policy and are promising the debt reduction.
The rising debt can be curbed with a combination of spending cuts and tax increases for individuals earning over $200,000 ($400,000 for couples). A similar approach by Clinton worked. Had we continued with Clinton's policies, our national debt would be less than one-third of what it is today.