There they go again.

'NO ONE would want us to go back to the days when the deficit was exploding and our economy was going downhill," President Bill Clinton recently told a sparsely attended rally in Detroit. This was Clinton's rebuttal to House Minority Whip Newt Gingrich's Contract with America, which includes Reaganstyle across-the-board tax cuts, a balanced budget amendment, term limits, congressional reforms, and some defense spending. Laura Tyson, chair-woman of the President's Council of Economic Advisors, has labeled Ging-rich's package "Voodoo Two," while White House Chief of Staff Leon Panetta reminds us that during the Eighties the rich got richer and the country verged on bankruptcy.

It is now up to the GOP to set the record straight, doing what George Bush failed to do in 1992: defend the longest peacetime expansion in history and the economic policies that propelled it. Indeed, the GOP must distinguish between Reaganism, which liberated entrepreneurship by lowering tax, regulatory, and inflation burdens, and Bushism, which suppressed growth by raising taxes, re-regulating business, and extinguishing consumer, real-estate, and business credit. If the Republican Party is to maintain its momentum going into the mid-term elections and pave the way to victory in 1996, it must not be afraid to attack Clinton's tax hikes, his regulatory mandates, and his zealous effort to nationalize health care as part of the same biggovernment agenda that George Bush supported.

Viewed in this light, the GOP task should be easy. The Bush-Clinton economic recovery cycle is vastly inferior to the economy's performance under Reagan. At a comparable stage, roughly three-and-a-half years from the recession trough, the current jobs expansion of 5.8 million looks anemic compared to Reagan's 10.4 million. Non-farm payrolls in this cycle have increased at an annual rate of 1.5 per cent, compared to 3.2 per cent under Reagan. Overall real GDP growth in the current recovery cycle is 2.9 per cent a year, compared with Reagan's 4.9 per cent.

Or take real disposable income, which measures take-home pay after taxes, adjusted for inflation. Most economists regard this as the best index of overall living standards. In the Reagan recovery it expanded at a 3.8 per cent annual rate during the first 13 recovery quarters, while it advanced at a 2.4 per cent yearly rate during the Bush--Clinton cycle. The picture is similar if you look at total workers' compensation, which includes both wages and benefits. Adjusted for inflation, this increased at a 1.6 per cent annual rate during the early Reagan recovery and by just 0.7 per cent yearly during the Bush--Clinton cycle.

Reagan's personal income, business, and capital-gains tax cuts created a tremendous 7.6 per cent annual growth in net new business formations, compared to the Bush--Clinton record of 4.3 per cent. Also on the entrepreneurial front, household net worth (all assets less all liabilities), adjusted for inflation, increased by 3.2 per cent annually during the early Reagan recovery, compared to a Bush--Clinton rate of 1.9 per cent. This figure, which includes stocks, bonds, real estate, and tangible assets, minus borrowing and other liabilities, is the best measure of saving. People save to invest, they invest to grow wealthier, and wealth comes from the market's valuation of homes, businesses, and financial securities.

The general public senses that the 1990s recovery is underperforming the 1980s cycle. In a recent survey conducted by Republican pollster Ed Goeas and Democratic pollster Celinda Lake, 38 per cent of the repondents said the economy is stagnating, while another 20 per cent said the country is still in recession. For the fourth year of recovery, this is a remarkable finding. What's more, a recent Times--Mirror survey asked people to compare Clinton and his five predecessors in terms of their importance and job performance. Clinton ranked ahead of only Gerald Ford, and on both questions Reagan placed first, the choice of roughly three times as many people as picked Clinton. So when will national Republican leaders start defending their most popular and highly regarded former President?

Even on fiscal issues, Reagan's record holds up well. In all the talk of huge deficits and growth in the federal debt, few people recognize that the sharp decline of inflation, surely a positive development, caused the deficit to rise by roughly $100 billion per year in the early and mid Eighties from estimates based on the inflated revenue projections made at the beginning of the decade. But high inflation caused the economy to shrink, while low inflation promoted productive investment, job creation, and sharply lower interest rates.

Meanwhile, after the 25 per cent across-the-board drop in income-tax rates, revenues increased by $100 billion, or 33 per cent, between 1982 and 1987. Corporate tax revenues jumped by $34 billion, or 68 per cent. The share of taxes paid by the top 1 per cent of income earners rose from 18 per cent to 24 per cent, the top 2 per cent's share increased from 20 per cent to 34 per cent, and the middle class's share fell from 67 per cent to 60 per cent. And while Mr. Clinton boasts of a declining deficit, which is expected to average about $185 billion in 1994-95, it should be remembered that Mr. Reagan's last three deficits (1987-89) averaged $150 billion. Furthermore, in 1989 the Congressional Budget Office predicted that the deficit would decline to $122 billion by 1994. Now the latest CBO estimates show much higher future deficits, rising to $251 billion in 2000 and $359 billion in 2003.

The CBO has not yet taken into account the effects of rising interest rates. Recall that Clinton promised lower interest rates last year as Congress passed his high-tax budget deal by razor-thin majorities. Instead, interest rates have risen by roughly two percentage points over the past year and appear to be headed still higher. When the CBO gets around to it, the out-year deficit totals will be revised upward by $60 billion to $70 billion. Which means that, after two huge tax hikes (1990 and 1993), Federal debt held by the public will be projected to rise by $2.5 trillion between 1990 and 2000. By comparison, the debt rose $1.4 trillion between 1981 and 1989.

Though the 1990s sequel looks to be worse, the deficit and debt story will forever be the Achilles heel of Reaganomics. Still, Reagan extinguished inflation, re-ignited economic growth, and ended the Cold War, all historic achievements. The cost of these achievements was an upturn in the ratio of Federal debt to GDP, which moved from 26.5 per cent in 1981 to 42.3 per cent in 1989, putting it roughtly where it was under President John F. Kennedy.

Big deal. There has never been a clear link between this ratio and economic growth. The ratio dropped to 25 per cent during the stagflationary Seventies, and it was over 100 per cent in the boom years after World War II. Given Reagan's success in restoring growth, slaying inflation, and ending the Cold War, the debt story amounts to nothing more than liberal ankle biting. Meanwhile, under the Bush--Clinton regime, with a Democratic House and Senate, higher taxes and re-regulation have blunted economic incentives, slowed our long-run growth potential, and produced an anxiety-ridden, sub-par recovery. If Democrats continue to attack the Gingrich Contract as "Reaganomics," the GOP should take it as high praise.