Posted by: Bruce Allen | August 27, 2008

Republican Economic Disinformation

National Debt 1953 - 2008

This post from February needs to be dusted off in honor of the Democratic National Convention.
Administration     Change in National Debt as % of GNP …… Verdict…..
_____________________________________________________________
Eisenhower………………… -16.2%……………………………… Outstanding
Kennedy/Johnson……….. -16.5%……………………………… Outstanding
Nixon/Ford…………………. -2.8%………………………………. Adequate
Carter…………………………. -3.2% ……………………………….One term only
Reagan……………………… +20.5% ……………………………..Impeachable
Bush Sr……………………… +13.1% ……………………………..Shameful
Clinton………………………… -8.8%……………………………… Very good
Bush Jr……………………… +12.4%*……………………………. Unacceptable
*End of year 2008 estimate.

The myth of “tax and spend Democrats” is, in fact, a myth. The myth of “dispassionate, fiscally responsible Republicans” transcends myth, having achieved jokedom. And, most amazingly, the myth that Republicans are better for the economy is (you guessed it) pure fiction.

There is some slop in these figures, due to macroeconomic lags and the partisan complicity of Congress. The balance of power between the White House and Congress has been roughly even over this period. One party has controlled both branches of government for about as long as they have been split. Republicans have controlled the White House for 32 of the 52 years included in the study. Otherwise, the figures speak for themselves.

We also correlated GNP growth by year during this same period to test the Republican claim that they are better at growing the economy than Democrats. These statistics are, unfortunately, just as rough. Yet the contrast is significant. During 32 years of 5 Republican administrations, measured in linked 2000 dollars, average annual GNP growth was 2.7%. During the 20 years of 3 Democratic administrations, average annual GNP growth was 4%, again measured in real dollars. So the Democrats were 50% more successful growing the economy during their terms, and did so without busting the budget every year.

Republicans who stand around today wringing their hands over the fact that our Treasury bonds are in the hands of foreign governments have only themselves to blame, in that the bulk of these bonds were issued to finance the fiscal irresponsibility of the 3 Republican presidents since 1980.

A headline crossed my desktop while I was working on this: “Federal Deficit Could Reach $800 Billion”. In this election year, the Democratic nominee must not allow John McCain to position himself as the business-friendly candidate, the guy for economic growth and fiscal discipline. That kind of thinking went out with Eisenhower.

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Responses

  1. Well, well. It seems as though Mr. Allen forgot to mention the “Great Society” enacted by the DEMOCRATS under LBJ in 1965-67, establishing the MASSIVE entitlement spending which grew by leaps and bounds under Democratic-controlled Congresses in the 1970s and1980s. These “Entitlements” are UNTOUCHABLE as far as the Federal Budget is concerned. In the 1960s the Democrats and their accomplices in the media sold the American people a set of totally unrealistic expectations at the zenith of American economic power, and when there is not now, nor ever will be enough tax revenue to fund what these spenthrifts wish, they blame it all on Republican presidents. What a crock of bullfeathers!

  2. These stats are very narrow and totally ignore the entire scene. You’re totally ignoring the cost of defense and the years of peace vs. conflict.

    The military build up during Reagan’s years was HUGE, but may have saved millions of American’s lives if not the planet. How much should we spend to save lives? What’s the proper price?

    Clinton chose to cut defense and ignore rumblings in the world during his 8 years in office. This was a choice that ‘left the problems for the next guy’. And boy did Bush inherit some problems, you must admit!

    As an Independent, I’m pissed at the fiscal irresponsibility of the Republicans as well, but this chart doesn’t tell the entire truth. Ah… damn statistics!

  3. The national debt goes up as taxes are lowered and borrowing increases. What increases without limit is the desire for more from the government — by both parties. Recent experience shows the Republicans to be the most avaricious of all. Securitize the risk, nationalize the loss. So, pick your poison, taxes or debt. Personally, I believe that we should pay our way as we go, that is, with taxes. They show up on everyone’s radar and force constant cost-benefits thinking, whereas borrowing just securitizes the cost, and moves it downstream, beyond our limited attention span. If taxes had been paying the full cost of Humvees and flack jackets, rather than money borrowed from the Chinese and others, we’d either be out of Iraq or Bush would have been pilloried from office. Look up historical tax tables (http://www.taxfoundation.org/taxdata/show/151.html), and think about the 93% you paid on $200K in 1955 and through the 60’s, then reflect on how you would feel about Iraq at those rates.

    As regards the size of the military, Douglas is correct, you cannot monetize human life. But on the other hand, the military is an unproductive financial sink, so you must always balance its cost against the existing threat. With the fall of the Berlin Wall and the end of the Cold War, it was entirely appropriate to reduce the Cold War infrastructure — there was no more huge global enemy. We won. The first Iraq War further demonstrated the feasibility of downsizing, since we used only a small portion of our forces and, with our allies, easily destroyed what was then the fifth or sixth largest army in the world. (Ironically, Bush-I stopped our advance on Baghdad because his advisers said we’d be bogged down for years there if we took the country). After every major conflict, nations reduce the size of the military; that’s what responsible government does. If you don’t, it will finally break the bank — even if you are replenishing the treasury by carrying off conquered county’s treasures, like the Germans and Romans did.

    Clearly we were unprepared for Iraq, but the decision to invade Iraq was neither preceded nor followed by an objective assessment of force structure for that invasion and occupation. Indeed, such planning was not permitted; worst-case planning was being negative, calling any of the decisions of the civilian ideologs in DOD into question was unpatriotic and a military career-killer. We were ready for Afghanistan (some may recall that as the place where the 9/11 perps lived) and I believe we would have prevailed there if we hadn’t been pre-empted by an administration with dreams of world dominance. We might have even been successful in Iraq if the Administration had taken the time to cultivate an alliance, then prepared a force structure for an occupation. But that is, of course, at odds with being the single dominant power in the world, able to reach out and crush any resistance with no commitment of treasury, military planning, or citizenry except all-out shopping. The Bush administration decided that our military was adequate for the job; that it wasn’t is the fault of the decider.

    Iraq has been a war based on ideology. Ideology trumps reality, facts, planning, logistics, everything. Just ask Hitler. Bill Clinton left a military plenty capable for the threat at the time, which was Al-Qaeda, and the Clinton staff attempted to pass along their intelligence and perceived threat to the Bush administration, who ignored it. “We’re number one!” is not the way to conduct a ground war. Of course Clinton left the military unprepared for Iraq; it wasn’t even on the horizon! So did Calvin Coolidge, but no one’s blaming him.


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