Inheritances and the dynamics of Budgetary change

Public Policy & Administration
Name
Institution
Different presidents have diverse approaches to budgeting. President Ronald Reagan and president Obama had their own different approaches to budgeting. Comparing presidents Ronald Reagan and Barrack Obama approaches to budgeting, it is clear that both relied on deficits of the budget in order to fuel the economy (Stein & Jamieson, 2014). The approaches to budgeting by the two leaders showed a lot of differences, for instance even though both presidents relied on the deficits to control the economy; the deficits by Reagan were smaller compared to those of Obama. During the first term of Reagan presidency the deficit was only 4.3% of the GDP as compared to 9.1% of Obama’s first term.
President Obama seems to have relied so much on the expanded federal expenditures; Reagan on the other hand made use of tax cuts (Stein & Jamieson, 2014). During Obama’s first term the federal expenditure was about 24.4% of the GDP while Reagan’s first term it was only 22.8%.
According to Keynesian theory of economy, fiscal policies are capable of reducing the cases of unemployment. President Obama and other demand siders’ advocates for more expenditure with a claim that when there is more federal spending there will job creation and when those hired by the government spend, more jobs would be created. President Reagan and the supply-siders on the other hand favor tax reductions as it ensures more money on the hands of consumers and whenever they spend the money, more jobs would be created.

After Obama took office in 2009, he proposed $831 billion as a stimulus package. Only 25% of this package constituted tax reduction as the project was supposed to run for long, supply-siders on the other hand argue that when tax cuts are coupled with reductions in withholding, money will flow faster to the consumers.
In the early years of Reagan’s presidency, he increased federal expenditures that had nothing to do with economic incentive, he increased the military budget but then at the end of his first term the economic growth grew the federal spending to 22.2% of GDP the level it was when he was in his term. During the two terms of Reagan, he lowered the individual income tax from 70% to 28%. During this period, the revenue taxes grew at the rate of 8.2%. President Obama on the other hand proposed an increment to the top tax bracket to some value above 35% but the tax increment should be avoided during the poor economic performance. The tax proposals by president Obama are expected to grow the economy (Jessica, 2013).
From the contrasts between President Obama and President Reagan Ronald above, it is President Obama who stood out. A number of reasons are in support of president Obama standing out for instance; under president Obama no real scandals have been recorded. None of the members of his administration have been handed down (Patashnik, 1999). A different case for President Reagan where there was the Iran-Contra scandal that ended up with many members of Reagan’s administration being indicted.
President Obama can be associated with better unemployment numbers. Both Obama and Reagan had to deal with recessions. When Reagan assumed office, the unemployment rate was at 7.5% but instead it shot up to 10.8% in his first half in office and only reduced to 6.6% in his seventh year in office. President Obama assumed office when the unemployment rate was 7.8% but he worked hard to reduce it to 5.6%. In Obama’s administration inflation is always under control and it has been maintained at a value below 3.9%, a different case for Reagan who hardly saw the inflation rate below 8.9%. Obama is also doing well with the budget in the sense that the budget-making process involves both the president and the congress and every budget is easy to account for. Under Reagan’s tenure some of the spendings were not easy to account for.
References
Stein, S. & Jamieson, D. (2014). Obama to Raise Minimum Wage for Federal Contract workers, Whitehouse.
Patashnik, M.E. (1999). Ideas, Inheritances and the dynamics of Budgetary change. Governance. 12(2), 140-176
Jessica, T. (2013). The Congressional Appropriations Process: an Introduction. Congressional Research service.