You have asked a vague and subjective question. There are innumerable ways in which we might compare apples and oranges, and endless criteria.
I think the most important factor to discuss is that a budget deficit by itself is not a meaningful criteria for comparison.
A deficit is neither intrinsically good nor bad.
The most important thing about deficits or debt in general is not how large they are. The most important thing is your ability to carry them in the environment of the future where they will have to be repaid. Since we do not know the future of Bush’s deficits, it is difficult to compare them with the Reagan years.
For example, it’s a lot harder to carry $10,000 at 20% than it is to carry $50,000 at 1%.
Because interest rates were a lot higher during the Reagan years a deficit was a tougher thing to carry than it is now. Interest rates are currently at a 45 year low. Debt has rarely been so easy to carry. Seeing as we are at a cyclical low in the interest rate cycle, prudent planning would suggest that we take advantage of low interest rates and borrow as much at as long a term as possible at low-interest against future needs to protect against the need to borrow at higher interest rates down the road.
From this perspective the Reagan debts were onerous, and we should be critizice Bush for not taking enough debt.
This is a great environment for borrowing money. For this reason, if you think you are going to need to buy a new car and finance it in the next couple of years, you would probably be very wise to do it now at a ridiculously low APR than to wait a few years and do it at 8 or 9%
So, from this perspective the Bush deficit is also not bad.
The second thing to think about when regarding a deficit is the environment in which the deficit is created. For example, we just came off of a recession, and a severe pullback in earnings. A deficit may seem unrealistically large in this kind of environment.
To put it in perspective, let’s say you are a commission salesman. Typically you make $10,000 a month, and you live well within your means. December though is usulally your biggest month. Sometimes you might make $20,000 in December. January usually stinks though. Sometimes you might only make $5,000 in January.
But, let’s say that in any given year you average about $10,000 a month.
So let’s examine deficit spending under these circumstances.
In December, if you spend $18,000 and give yourself a $2,000 surplus have you been prudent? Probably not. If in January you spend $8,000 and have a $2,000 deficit have you been foolish? Again, probably not.
In fact, you have been foolish in December even though you had a surplus. You spent more than you know you can sustain. In January you have spent less than you can sustain and have probably been prudent.
The Recession we have seen is much like the January in this example. It makes the effects look ugly on a short term basis, yet it is almost certainly sustainable in the long term, provided spending doesn’t increase proportionately with the economy’s recovery. So, it’s not a problem, IMO.
What may be a problem is something like this Medicare bill which has every potentially of growing far beyond the growth of underlying economy, in much the way social security has grown to become a larger and larger liability as a proportion of government outlays. Time will tell.
In the Reagan years the ability to sustain the deficit and grow the economy to encompass it was a much bigger fear than it is now. The economy needed to grow in an unprecedented fashion. On top of that, debt was more difficult to carry.
In the Bush years, we don’t really have to worry too much about the ability of the economy to grow to encompass the deficit because the economy is still artifiically depressed and debt is easy. On the other hand, we run into the possibility of escalating expenses from a medicare bill and Iraq and such whose liabilities may grow at a rate faster than our ability to sustain them and in an environment not as favorable to carrying such liabilities.