There has been much talk recently of George W. Bush’s fiscal policy. In a nutshell, this policy appears to entail: (1) tax cuts (in order to stimulate economic activity); (2) an increase in government spending on the military (to fight the war on terror); and (3) a decrease in government spending in other areas. I will not attempt a full analysis of this fiscal program, but will provide some perspective in the context of the historical pattern of U.S. government spending and taxation. plots U.S. government spending and taxation (as a ratio of GDP) beginning in 1930.
