I didn't say Clinton cut or increased taxes. What you are describing is the folly of cutting taxes without cutting spending. It's simple math... You cut revenue and increase spending, resulting in loss of a surplus, instead of using it to fight recessions. The market is a force as well, but even if markets were identical, the cut removed the revenue covering the surplus.
You are not actually disagreeing, but are putting more weight into spending, to ignore that even equal spending with a lower tax rate, would result in lower tax revenue. As in, if the issue was solely the market, it would have returned to the previous surplus when recession ended. Which, it simply did not...
Which is why I am talking about the deficit, not GDP. If the GDP percentage in taxes is stable, it doesn't mean that the taxes generated match the spending causing a deficit. If GDP drops along with taxes, the yearly budget does not drop along with it.People like to make a big deal out of tax rates, but the reality is they don't mean much as far as government revenue goes. It's called Hauser's Law of Economics, and revenues don't really care about tax rates honestly, it's all a function of GDP. Tax rates influence the economic activity that happens, but they don't actually or decrease revenue, because people adapt and change their behavior in the face of benefits or penalties. This keeps revenue relatively stable around 18-19% of GDP (and higher during bubbles, lower in recessions).
That would mean I am correct, unless Bush cuts matched spending cuts, which is absolutely did not.The Clinton magic was primarily working with the Republican congress and keeping spending down (around 20% of GDP) and benefiting from the dotcom bubble causing revenues to hit just under 21%.