hilzoy, reflecting on a pay-per-view Paul Krugman column arguing that, for political reasons, “Given a choice between cutting the deficit and spending more on good things like health care reform, Democrats in Congress should choose the spending,” observes,
[I]t has not escaped my notice that Democrats’ hard work at cutting the deficit, and our willingness to postpone a lot of things we think badly need doing for the sake of fiscal responsibility, have in practice served only to allow Republicans to rack up more debt without having to face the consequences. The Democrats have spent the last thirty years being fiscally responsible.
The Republicans in the audience are laughing uproariously, I’m sure. But hilzoy backs her assertion up with a graph produced by the Congressional Budget Office in August tracking federal budget outlays as a percentage of GDP:
She looks at the numbers and concludes, “So: Republicans (Nixon, Reagan/Bush) massively increase the deficits. We (Carter, Clinton) come in and bring the deficit under control again.”
Let’s leave aside for the moment that Congress passes budgets and presidents sign them. Since FDR’s administration, presidents have proposed budgets, asserting a strong (and quite possibly unconstitutional) influence on the process. But even if we ignore which party controls the Congress, the chart doesn’t quite say what hilzoy says it does.
Carter served from January 1977 to January 1981. “His” first budget would have been October 1977 to September 1978 and his last ending in September 1981. He canceled some big ticket defense items but also started a trend toward high tech defense spending, gave away the Panama Canal, let terrorists take over an occupy our embassy in Iraq, lusted in his heart, and got attacked by a rabbit. Using my crude graphics talents, we see “his” slice of the graph at right. It certainly appears the outlay line trends mostly upward. [Note: Click on this or any of the thumbnails below for a larger image.]
Carter was succeeded in office by Ronald Reagan, who served two terms (January 1981 to January 1989), and ten George H.W. Bush, also a Republican, who served January 1989 to January 1993. Their terms coincided with a massive increase in defense spending, a big tax cut followed by two comparatively small tax hikes, the end of the Cold War, and wars in Panama and the Persian Gulf region. Their budget slice is at right. We have a short spike, a long dip, followed by a short spike, ending with a dip.
They are followed by Bill Clinton, a New Democrat who presided over a land of milk and honey. Peace and prosperity were the order of the day (except for numerous terrorist strikes by an obscure outfit named “al Qaeda” that twice declared war on the West). Thanks to Al Gore’s breaking of ashtrays on a late night talk show, spending was slashed. (It also helped that the end of the Cold War allowed massive cuts in Defense, the largest pile of discretionary money in the budget.) Plus, money poured in thanks to the irrationally exuberant dot.com boom, spurred by Gore’s invention of the Internet(s). Their slice of the graph (October 1993 to September 2001) is an almost continuous dip in outlays with a steady rise in revenue.
In 2000, Al Gore won the popular vote but, thanks to a conspiracy at the Supreme Court, the evil thieving of Ralph Nader, and some pro-Buchanan Jews in Palm Beach, Florida, George W. Bush won the Electoral Vote. He somehow got re-elected in 2004, despite the fact that John Kerry was a war hero and really, really smart. Anyway, his term has been characterized by tax cuts (for the class of people rich enough to actually pay taxes, of course) and profligate spending on social programs. There was also an inherited recession (it technically became a recession during his term, but the first two quarters of the required three were in Clinton’s term, owing to a crash of the aforementioned dot.com bubble for which no president is responsible), which was exacerbated by the 9/11 attacks by those al Qaeda people mentioned earlier. Oh, and a war on terrorism and the invasion, occupation, COIN, and rebuilding of Iraq. His slice of the graph so far (no point in including projections, which are meaningless) mostly trends upward.
If we factor out variables other than the party of the presidency, it seems to me that we get a wash. Mostly “irresponsibility” under Democrat Carter but mostly “fiscal restraint” under Democrat Clinton. A roller coaster under Republicans Reagan and Bush 41 but mostly “restraint” compared to their entry point but mostly “irresponsibility” under Bush 43. If, however, we consider that there are external events that trigger spending and produce revenue over which presidents have little control, then it gets messier.
UPDATE: As to the Krugman question, I think he’s right as far as it goes. The voters are far more likely to reward spending on something they like than to punish for the resulting deficits.
