The right answer is massive Federal deficit.
The biggest problem facing the Bush administration was the national debt, which stood at $2.6 trillion in 1989, nearly three times its 1980 level. Bush’s pledge not to increase taxes (meaning mainly income taxes) and his insistence upon lowering capital-gains taxes—on profits from the sale of corporate stock and other property—made it more difficult to reduce the annual deficit or trim the long-term debt. Likewise, Bush was not willing to make substantial cutbacks in spending on defense, the federal bureaucracy, and welfare programs. As a result, by 1990 the country faced “a fiscal mess.”
