Republican, Democrats, National Debt, and Fiscal Responsibility

I was born in Texas and raised in Oklahoma in a very conservative, Republican household. I was raised believing that Republicans are for small government and low taxes. I was raised to believe that only the Republicans shared my Christian values and they had the safety of our country well in hand. Democrats, by contrast, wanted the government to fix everything, wanted to raise everyone’s taxes, were pro-abortion, and would do nothing to protect our country.

As I got older, I began to question whether the Republican Party has lived up to what it professes. I believe in all the things they profess: I believe in having strong national security, I believe in the sanctity of life, I believe in fiscal responsibility. But what I’ve found in my research is that the Republicans don’t put these values into practice.

I’m writing articles, based on the research I’ve done, that dispel the myths of Republicans. This article focuses on the economic myths: Republicans are fiscally responsible, Republicans believe in less government spending, and Republicans are better for the economy. My references appear at the end of the article.

First, some definitions. Political economists often talk about the national debt and the federal deficit. These two terms mean different things. The national debt refers to the accumulation of all the money the US government has borrowed over all the years that we’re still paying back. By contrast, the federal deficit refers to how much money the US government is spending over and above its budget in a single year. So the deficit reverts to zero at the beginning of each fiscal year whereas the national debt does not.

Now let’s take a look at the facts. We’ll start with national debt and raw numbers. In 2000, when Bill Clinton left office, the national debt was $5.7 trillion. Today, after seven years of George W. Bush, it is $9.6 trillion. Bush has almost doubled our national debt in eight short years.

But let’s go further back and take a look at the average increases in national debt by president. It is most useful to look at the national debt as a percentage of gross domestic product (GDP). GDP is the total market value of all final goods and services produced within the country in a given period of time (usually a calendar year). Since 1945, there have been seven presidential terms held by Democrats and nine held by Republicans. During every term held by a Democratic president since this time, that president has reduced the national debt as a percentage of GDP. The Roosevelt/Truman administration made the greatest dent with a 24.3% reduction. By contrast, only three terms held by a Republican president since 1945 showed a reduction in the national debt as a percentage of GDP. Further, Eisenhower made the most significant reduction for Republicans at a 10.8% decline between 1953 and 1957. This is less than half the decline made by the Democrats Roosevelt/Truman. Even further, every single Republican president since 1973 (beginning with Nixon/Ford) has increased the national debt as a percentage of GDP. Let’s summarize: Since 1946, Democratic presidents increased the national debt an average of only 3.2% per year. The Republican presidents increased the national debt by an average of 9.7% per year. Republican presidents out-borrowed and out-spent Democratic presidents by a three-to-one ratio. Putting that in very real terms, for every dollar a Democratic president has raised the national debt in the past 59 years, Republican presidents have raised the debt by $2.99.

Looking further at federal spending, we find that between 1978 and 2005, Democrats increased federal spending by 9.9% while Republicans increased federal spending by 12.1%. Further, in the same period, Democrats increased the national debt by 4.2% whereas the Republicans increased it by 36.4%. It is true that the Republicans held 4 terms during this time while Democrats only held 3. However, looking at each president since 1978, we see that Reagan increased the national debt by a whopping 89.2% during his two terms. You read that right, Reagan nearly doubled the national debt in 8 years.

Now, you might say, “Well, but productivity increased more during that spending.” Using GDP as a measure of productivity (which is standard procedure), you’d be dead wrong. During the years 1978 – 2005, the Democrats increased the GDP by 12.6% while the Republicans only increased it by 10.7%. The president responsible for the largest increase in GDP, or the productivity of our country, during this time was Bill Clinton, a Democrat, who increased the GDP by 28.4% during his eight years in office.

Some people argue that GDP is an imperfect measure of productivity. So let’s look at job creation. Of all the presidents since 1933, Bill Clinton has created by far the most jobs. During his tenure, he created 22.7 million jobs, a 4.9% increase. The worst president in terms of job creation is George W. Bush. During his first term, he created only 100,000 jobs, a 0.002% increase. On average, between 1933 and the present day, Republican have increased jobs by 0.21% while Democrats have increased jobs by 3.24%.

(A note about Reagan: All of the economic growth experienced during Reagan’s presidency was subsidized by the federal debt. Our federal debt almost doubled during his presidency. Talk about a big spender! He mortgaged our future, and it is abundantly clear by the widening gap between rich and poor that the policies he enacted, Reaganomics, if you will, are not sustainable.)

We can also get an idea of how “big” government is by looking at the national debt as a percentage of GDP (or, to put it another way, how much the government is spending relative to everyone else). Republicans advocate for small government. They portray the Democrats as people who want big government. Looking at the facts, we see that government spending is biggest when a Republican president is in office. Republicans historically have bigger governments than Democrats. Five out of the eight presidential terms held by Republicans since 1945 have seen an increase in government spending as a percentage of GDP, an increase in the size of the government. Zero of the seven presidential terms held by Democrats since that time have seen an increase in the size of the government. In fact, every single Democratic president since 1945 has reduced the size of the government by reducing the amount of national debt as a percentage of GDP.

Looking at Clinton more closely, we see that he presided over the largest economic expansion on record, the fastest income growth most workers had experienced in a generation, and the disappearance of the federal budget deficit. When he came into office in 1993, the federal budget deficit was $290 billion and was projected to be $455 billion by 2000. Clinton made it his number one goal to reduce the national debt. He did so by raising taxes on the wealthy and cutting taxes for the poor. By the end of his presidency, he had eliminated the federal deficit. In 1999, he recorded a federal budget surplus of $122.7 billion. In 2000, he topped his own record with a federal budget surplus of $230 billion. He also made huge gains in the national debt. In May 2000, he made a $216 billion payment on the federal debt, the largest debt paydown in American history. The federal government’s long-term debt in 2000 was $2.4 trillion lower than it was projected to be when Clinton took office in 1992. In September 2000, he explained that the $5.7 trillion national debt had been reduced by $360 billion in the previous three years. He reduced it by $223 billion in 2000 alone. At the 2000 rate of debt paydown, the US was expected to have paid off its entire debt by 2010.

Now, near the end of George W. Bush’s presidency, our national debt is $9.6 trillion. We owe $5 trillion of that to China, a communist country we don’t like and who doesn’t like us. We have made absolutely zero payments on our national debt since Bush took office. Instead, Bush has nearly doubled our national debt, and he keeps spending. The economy is weaker, the dollar is weaker, and we’re further in debt than we ever have been before. We continue to pay for the war and reconstruction in Iraq despite the fact that the Iraq government has a $79 billion surplus earning interest in banks in New York. This is the epitome of fiscal irresponsibility.

Looking to the future, the spending will continue if John McCain is elected. A quick skim through his website or perusal of the Tax Policy Center’s analysis of both candidates’ policies reveals that McCain’s economic policies are merely continuations of George W. Bush’s policies. A continuation of these policies will utterly ruin our economy. Bush has hurt us exponentially in just eight years. We cannot afford even one more year of his policies, let alone four more.

The bottom line: Republicans are fiscally irresponsible. They spend more and increase the debt more than Democrats. Economies under Republican presidents are, in general, weaker than economies under Democratic presidents. The Bush administration has squandered the gains made by the Clinton administration, and John McCain promises to keep squandering our money.

References:

“Clinton announces record payment on national debt”

http://archives.cnn.com/2000/ALLPOLITICS/stories/05/01/clinton.debt/

“President Clinton announces another record budget surplus”

http://archives.cnn.com/2000/ALLPOLITICS/stories/09/27/clinton.surplus/

“An Analysis of the National Debt (1938 to Present): An Analysis of the Presidents who are Responsible for the Borrowing”

http://www.cedarcomm.com/~stevelm1/usdebt.htm

“Jobs created during US presidential terms – Wikipedia “

http://en.wikipedia.org/wiki/Jobs_created_during_U.S._presidential_terms

“National Debt by US Presidential Terms – Wikipedia” http://en.wikipedia.org/wiki/National_debt_by_U.S._presidential_terms

“Is History Siding with Obama’s Economic Plan?” – NY Times 8/30/2008

http://www.nytimes.com/2008/08/31/business/31view.html?8dpc