deficit debate of the 1980s, this time with the benefit of the Commerce Department's newly revised data for that period and also in light of the experience of the 1990s when sizeable budget surpluses replaced chronic large deficits. In the 80's ran by Reganomics there was a great deficit that the country had never witness. So there had to be a method to counter this deficit. To turn a deficit to the surplus you will have to have an expansion through employment.
The focus was to get full employment and to do so there had to be jobs created to lower the unemployment rate. In the 80's the unemployment rate was far too high at 5 - 8%. The unemployment rate have dropped dramatically since the 80's in the 1997 it was at 4.9% and dropped even more in 1999 4.2%. The policy used was the fiscal policy to turnaround the the deficit of 290 billion in 1992 which was 4.7% of the GDP and the economy went to a surplus for the 7 years straight at an average of 3.7%. The reason for this is because of the investment. The familiar conclusion that sustained government deficits at full employment depress private capital formation has stood up well in both regards. By contrast, the more recent experience in particular has sharply contradicted any simple notion that the government balance and the current account balance move in parallel. Other relevant issues include the equilibrium (that is, noninflationary) unemployment rate, the response of private saving to government dissaving, and the role of debt and equity in financing private capital formation. .