Comparing Presidential Tax Cuts and Deficits During the Modern Era

A lot of people complain about the budget deficit, but if you put the deficit in perspective, it's actually lower as a percentage of GDP than it has been in years past. Most people view deficits as a negative, but in order for our economy to grow, we need it to be a larger percentage of GDP than it currently is. Mike Norman says that if we can increase our deficit to 5%-6% like it was when Ronald Reagan was in office -- which led to the 1980-2000 boom -- we'll be better off in the long run. Erasing the deficit, as many people want, will kill us. If you want to look at one thing in deciding how to make long-term investments, the trend of the deficit will tell you the most about the direction of the economy. Our stock market has gone nowhere since 1998 because our fiscal balance crossed the line between deficit and surplus.

Tune in from 9 to 11 a.m. to Industrialinfo.com Radio every weekday as Mr. Norman hosts "The Economic Contrarian," following economics with a unique style that examines arguments against widely followed themes.

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