One thread in the conversation is that the tax rates will rise from the the Bush era rates back to the Clinton era rates and Democrats state that the Clinton era was an economic boom time. But will the Obama administration and his allies in Congress also lobby for Clinton era spending levels?
Indeed, revenue during the Clinton era ranged from 17-20% of GDP. I'm not an economist so I don't know how much of the rise in revenue was due to the increased tax rates and how much was due to the economy booming.
The spending during that same period ranged from 21-18%. Spending declined as Clinton worked with the GOP Congress to reduce overall spending of which a certain amount was the post-Cold War defense draw down.
Fast forward to where we are now where any deal on the Fiscal Cliff will probably involve an increase in taxes. The current talking point is tax rates should rise to Clinton era levels for those $250,000 and above. As such, u…