In response to:

Why Did America’s Economy Boom When Reagan and Clinton Reduced the Burden of Spending?

John1418 Wrote: Mar 07, 2013 3:13 PM
One point no one made is that when marginal tax rates were extremely high post WW II there were so many loopholes in the tax code that the wealthy paid LESS income tax than they do today.

Triggered by an appearance on Canadian TV, I asked yesterday why we should believe anti-sequester Keynesians. They want us to think that a very modest reduction in the growth of government spending will hurt the economy, yet Canada enjoyed rapid growth in the mid-1990s during a period of substantial budget restraint.

I make a similar point in this debate with Robert Reich, noting that  the burden of government spending was reduced as a share of economic output during the relatively prosperous Reagan years and Clinton years.