Question

Who was president during these budget surpluses? Is your answer consistent with the characterization of Republicans as favoring small government (less spending) and Democrats as favoring large government (more spending)? What other factors—besides presidential politics—contribute to budget surpluses?

Answer 1

It has been observed that economy of the United States experienced budget surplus during the presidentship of Bill Clinton, who was a republican. During the presidentship of Democrats, economy has experienced deficit most of the time in the budget. Yes, the answer is consistent with the characterization of republicans as favoring small government spending and Democrats favoring large government spending.

Beside presidential politics, other factors that contribute to budget surpluses include overall growth of the economy, tax buoyancy ratio. Increase in the overall growth of the economy increases tax GDP ratio of the country and thus reduces budget deficit in the country.