Washington Post : : Democratic Superiority, by the Numbers
Michael Kinsley examines the economic records of Democratic and Republican administrations and documents a 45 year pattern of Republican underachievement. Or 'overachievement', perhaps, at increasing the size and intrusiveness of the government, and the amount of American debt.
Federal spending (aka "big government"): It has gone up an average of about $50 billion a year under presidents of both parties. But that breaks down as $35 billion a year under Democratic presidents and $60 billion under Republicans. If you assume that it takes a year for a president's policies to take effect, Democrats have raised spending by $40 billion a year and Republicans by $55 billion.
Leaning over backward even farther, let's start our measurement in 1981, the date when many Republicans believe that life as we know it began. The result: Democrats still have a better record at smaller government. Republican presidents added more government spending for each year they served, whether you credit them with the actual years they served or with the year that followed.
Dwight Meredith has compiled more detailed information, comparing each administration's record on budget deficits, size of government, economic growth, unemployment, inflation, and job creation.
Federal spending (aka "big government"): It has gone up an average of about $50 billion a year under presidents of both parties. But that breaks down as $35 billion a year under Democratic presidents and $60 billion under Republicans. If you assume that it takes a year for a president's policies to take effect, Democrats have raised spending by $40 billion a year and Republicans by $55 billion.
Leaning over backward even farther, let's start our measurement in 1981, the date when many Republicans believe that life as we know it began. The result: Democrats still have a better record at smaller government. Republican presidents added more government spending for each year they served, whether you credit them with the actual years they served or with the year that followed.
Dwight Meredith has compiled more detailed information, comparing each administration's record on budget deficits, size of government, economic growth, unemployment, inflation, and job creation.
posted by Management at 5:22 PM
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Democratic Superiority, by the Numbers
By Michael Kinsley
Sunday, April 3, 2005; Page B07
It was the TV talker Chris Matthews, I believe, who first labeled Democrats and Republicans the "Mommy Party" and the "Daddy Party." Archaic as these stereotypes may be, they do capture general attitudes about the two parties. But we live in the age of the one-parent family, and it is Mom more often than Dad who must play both roles.
It has not escaped notice that the Daddy Party has been fiscally misbehaving. But it hasn't really sunk in how completely Republicans have abandoned allegedly Republican values -- if in fact they ever really had such values.
Our text today is the statistical tables of the 2005 Economic Report of the President. I did this exercise a while back with the 2004 tables and couldn't quite believe the results. But the 2005 data confirm it: The party with the best record of serving Republican economic values is the Democrats. It isn't even close.
The Republican values I refer to are universal. We all want prosperity, oppose unemployment, dislike inflation, don't enjoy paying taxes, etc. These values are Republican only in the sense that Republicans are supposed to treasure them more and to be more reluctant to sacrifice them for other goals such as equality and clean air.
Statistics back to 1959 make this clear. A consistent pattern over 45 years cannot be explained by shorter-term factors, such as war or who controls Congress. Maybe presidents can't affect the economy much, but the assumption that they can and do is so prominent in Republican rhetoric that they are stuck with it. So consider:
Federal spending (aka "big government"): It has gone up an average of about $50 billion a year under presidents of both parties. But that breaks down as $35 billion a year under Democratic presidents and $60 billion under Republicans. If you assume that it takes a year for a president's policies to take effect, Democrats have raised spending by $40 billion a year and Republicans by $55 billion.
Leaning over backward even farther, let's start our measurement in 1981, the date when many Republicans believe that life as we know it began. The result: Democrats still have a better record at smaller government. Republican presidents added more government spending for each year they served, whether you credit them with the actual years they served or with the year that followed.
Federal revenue (aka taxes): You can't take it away from them: Republicans do cut taxes. Or rather, tax revenue goes up under both parties but about half as fast under Republicans. It's the only test of Republican economics that the Republicans win.
That is, they win if you consider lower federal revenue to be a victory. Sometimes Republicans say that cutting taxes will raise government revenue by stimulating the economy. And sometimes they say that lower revenue is good because it will lead (by some mysterious process) to lower spending.
The numbers in the Economic Report of the President undermine both theories. Spending goes up faster under Republican presidents than under Democratic ones. And the economy grows faster under Democrats than Republicans. What grows faster under Republicans is debt.
Under Republican presidents since 1960, the federal deficit has averaged $131 billion a year. Under Democrats, that figure is $30 billion. In an average Republican year, the deficit has grown by $36 billion. In the average Democratic year it has shrunk by $25 billion. The national debt has gone up more than $200 billion a year under Republican presidents and less than $100 billion a year under Democrats.
As for measures of general prosperity, each president inherits the economy. What counts is what happens next. Let's take just two measures, although they all show the same thing: Democrats do better under every variation. From 1960 to 2005 the gross domestic product measured in year-2000 dollars rose an average of $165 billion a year under Republican presidents and $212 billon a year under Democrats. Measured from 1989, or measured with a one-year delay, or both, the results are similar. And how about this one? The average annual rise in real per capita income -- that's the statistic that puts money in your pocket. Democrats score about 30 percent higher.
Democratic presidents have a better record on inflation (averaging 3.13 percent compared with 3.89 percent for Republicans) and on unemployment (5.33 percent versus 6.38 percent). Unemployment went down in the average Democratic year, up in the average Republican one.
Almost forgot: If you start in 1981 and if you factor in a year's delay, Republican presidents edge out Democratic ones on inflation, 4.57 to 4.36. Congratulations.
The writer is editorial and opinion editor of the Los Angeles Times.
Wednesday, October 16, 2002
Just for the Record
From FY1962 (the first Kennedy budget) through FY2001 (the last Clinton budget) presidents have prepared forty budgets. Control of the White House was evenly divided between Republicans and Democrats with each party preparing and submitting twenty budgets. We decided to take a look at the fiscal performance of the Federal government during that period. The measurement we used was budget deficits and surpluses. We wanted to control for inflation to make the comparisons meaningful. Fortunately, the Government Printing Office publishes such information on the web. We got our data here at table 1-3. All dollars are adjusted for inflation and are expressed as 1996 dollars.
Kennedy-Johnson Administrations (FY1962-FY1969)
During the eight years of the Kennedy and Johnson administrations (FY1962-1969), the budget was in deficit for seven years. The largest deficit was $110.1 billion in FY1968. The only surplus was $13.4 billion in FY1969. The Kennedy-Johnson budgets added $250.9 billion to the national debt and averaged a yearly budget deficit of $31.36 billion.
Nixon-Ford Years (FY1970-FY1977)
The Nixon and Ford administrations ran deficits for each of their eight years. The highest deficit was $188 billion in FY1976. The lowest deficit was $11.1 billion in FY1970. The Nixon-Ford budgets added $702.7 billion to the national debt and averaged a yearly deficit of $87.84 billion.
Carter Years (FY1978-FY1981)
The Carter administration ran a deficit in each of its four years. The highest deficit was $136.6 billion in FY1980 and the lowest was $83.1 billion in FY1979. The Carter budgets added $482.8 billion to the national debt and averaged yearly budget deficits of $120.7 billion.
The Reagan Years (FY1982-FY1989)
The Reagan administration ran budget deficits in each of its eight years. The lowest deficit was $188.6 billion in FY1989 and the highest was $311 billion in FY1983. The Reagan years added $1.94 trillion to the national debt and averaged annual deficits of $242.23 billion.
The Bush (George Herbert Walker) Years (FY1990-FY1993)
The Bush administration ran deficits in each of its four years. The highest deficit was $318.5 bilion in FY1992. The lowest was $261.9 billion in FY1990. The Bush years added $1.16 trillion to the national debt and averaged a yearly deficit of $289.68 billion.
The Clinton Years (FY1994-FY2001)
The Clinton administration ran deficits in each of its first four years and surpluses in each of the last four years. The largest deficit was $213 billion in FY1994 and the largest surplus was $219 billion in FY2000. The Clinton years paid down a net $14.2 billion of national debt and averaged a surplus of $1.78 billion.
Summary
The twenty years of budgets prepared by Republican presidents increased the national debt by $3.8 trillion. The average yearly deficit under Republican budgets was $190 billion.
The twenty years of budgets prepared by Democratic presidents increased the national debt by $719.5 billion. The average yearly deficit under Democratic budgets was $36 billion.
Just for the Record Part II
In 1961, under the last Eisenhower budget, there were 782,000 executive branch, non-defense employees in the Federal Government. By the end of 2001 that number had risen to 1,151,000 employees. That is an increase of 369,000 employees or a 47% increase over the 40 year period.
We decided to determine in which presidential terms that increase occurred. In order to do so, we looked at the years 1962 through 2001. We assigned credit or blame to an administration for the years for which it submitted a budget. Thus, for our purposes, the Kennedy term runs from 1962-1965. The Johnson term runs from 1966-1969 etc. We got our data here at table 17-1.
Kennedy 1962-1965
The last Eisenhower budget had 782,000 non-defense employees. By the end of the Kennedy term that number had risen to 857,000. The Kennedy administration is assigned responsibility for the addition of 75,000 government employees.
Johnson 1966-1969
The Johnson years saw the number of government employees rise to 960,000. His administration is assigned responsibility for the addition of 103,000 employees.
Nixon (which include the Ford years) 1970-1977
The Nixon years saw non-defense government employees rise from 960,000 in Johnson’s last year to 1,173,000 in 1977. Nixon (and Ford) have responsibility for an increase of 213,000 employees.
Carter 1978-1981
During the Carter years, the number of non-defense federal employees dropped by 14,000.
Reagan 1982-1989
In the Reagan years, the federal workforce increased by 3,000 employees.
Bush 1990-1993
Under George Herbert Walker Bush, the number of non-defense government employees increased from 1,162,000 to 1,256,000 for a gain of 94,000 employees.
Clinton 1993-2001
During the Clinton years the number of non-defense government employees fell from 1,256,000 to 1,151,000 for a decrease of 105,000 employees.
Conclusion
Under the 20 years of Republican administrations the number of non-defense government employees rose by 310,000.
Under the 20 years of Democratic administrations, the number of non-defense government employees rose by 59,000.
Of the 369,000 employees added between 1962 and 2001, 84% were added under Republican administrations and 16% were added under Democratic administrations.
Just for the Record Part III
Economic Growth
In the Just for the Record series of posts we look at various aspects of economic or fiscal performance for the forty-year period from 1962-2001. We chose 1962 for the starting point as it was the first year for which President Kennedy submitted a budget. Thus, for our purposes, the Kennedy term runs from 1962-1965. The Johnson term runs from 1966-1969 etc. During the forty-year period, each party controlled the White House for a total of twenty years.
In Part I, we looked at the budget deficit. In Part II we looked at the growth of non-defense employees of the federal government. In this post we look at the growth of GDP. We got our data here.
Kennedy 1962-1965
The economy grew each year of the Kennedy “term" by rates of 6.0%, 4.3%, 5.8% and 6.4%, respectively. Those four years average 5.6% GDP growth.
Johnson 1966-1969
The economy grew each year of the Johnson “term” by rates of 6.6%, 2.5%, 4.8% and 3.0%, respectively. Those four years average 4.2% GDP growth.
Nixon 1970-1977
The economy grew in six of the eight Nixon (and Ford) years and fell in two years. The percentage growth for each of those years is 0.2%, 3.3%, 5.4%, 5.8%, -0.6%, -0.4%, 5.6% and 4.6%, respectively. The average of those eight years is 2.3% GDP growth.
Carter 1978-1981
The economy grew in three of the four Carter years. The percent change in GDP for those years is 5.5%. 3.2% -0.2% and 2.5% respectively. The average of those years is 2.8% GDP growth.
Reagan 1982-1989
The economy grew in seven of the eight Reagan years. The percent change in GDP for those years is –2.0%, 4.3%, 7.3%, 3.8%, 3.4%, 3.4%, 4.2% and 3.5%, respectively. The average of those years is 3.5% GDP growth.
Bush 1990-1993
The economy grew in three of the four Bush years. The percent change in GDP for those years is 1.8%, -0.5%, 3.0% and 2.7%, respectively. The average of those years is 1.8% GDP growth.
Clinton 1994-2001
The economy grew in each of the eight Clinton years by the following percentages, 4.0%, 2.7%, 3.6%, 4.4%, 4.2%, 4.9%, 3.8% and 0.3%, respectively. The average for those years is 3.5% GDP growth.
Conclusion
The economy grew in 19 of the 20 years in which Democratic Presidents submitted a budget and in 16 of the 20 years in which Republican Presidents submitted a budget.
For the twenty years for which Republican presidents submitted budgets, the average rate of GDP growth was 2.94%.
For the twenty years in which Democratic presidents submitted budgets, the average rate of GDP growth was 3.92%.
Kevin Drum of CalPundit has looked at economic growth by party of the President for the period from 1948 through 2001. He used “lag times” of 3, 4 and 5 years in assigning responsibility for economic performance to a President. In each case, economic growth was higher in Democratic administrations than in Republican administrations.
Just for the Record Part IV
Unemployment
In the Just for the Record series of posts we look at various aspects of economic or fiscal performance for the forty-year period from 1962-2001. We chose 1962 for the starting point as it was the year in which President Kennedy submitted his first budget. Thus, for our purposes, the Kennedy term runs from 1962-1965. The Johnson term runs from 1966-1969 etc. During the forty-year period, each party controlled the White House for a total of twenty years.
In Part I, we looked at the budget deficit. In Part II we looked at the growth of non-defense employees of the federal government. In Part III, we looked at growth in GDP. In this post we look at unemployment. We got our data here.
Kennedy 1962-1965
During the Kennedy years the unemployment rate was 5.5%, 5.7%, 5.2% and 4.5%, respectively. Those four years average an unemployment rate of 5.2%.
Johnson 1966-1969
During the Johnson years the unemployment rate was 3.8%, 3.8%, 3.6% and 3.5%, respectively. Those four years average an unemployment rate of 3.7%.
Nixon 1970-1977
During the Nixon (and Ford) years the unemployment rate was 4.9%, 5.9%, 5.6%, 4.9%, 5.6%, 8.5%, 7.7% and 7.1% respectively. Those eight years average an unemployment rate of 6.3%.
Carter 1978-1981
During the Carter years the unemployment rate was 6.1%, 5.8%, 7.1% and 7.6% respectively. Those four years average an unemployment rate of 6.7%.
Reagan 1982-1989
During the Reagan years the unemployment rate was 9.7%, 9.6%, 7.5%, 7.2%, 7.0%, 6.2%, 5.5%, and 5.3% respectively. Those eight years average an unemployment rate of 7.3%.
Bush 1990-1993
During the Bush years the unemployment rate was 5.6%, 6.8%, 7.5% and 6.9% respectively. Those four years average an unemployment rate of 6.7%.
Clinton 1994-2001
During the Clinton years the unemployment rate was 6.1%, 5.6%, 5.4%, 4.9%, 4.5%, 4.2%, 4.0% and 4.8%, respectively. Those eight years average an unemployment rate of 4.9%.
Conclusion
For the twenty years in which Republican Presidents submitted a budget, the unemployment rate averaged 6.75%.
For the twenty years in which Democratic Presidents submitted a budget, the unemployment rate averaged 5.1%.
Kevin Drum of CalPundit has looked at unemployment rates by party of the President for the period from 1948 through 2001. He used “lag times” of 3, 4 and 5 years in assigning responsibility for economic performance to a President. In each case, unemployment was lower in Democratic administrations than in Republican administrations.
Just for the Record Part V
Inflation
In the Just for the Record series of posts, we look at various aspects of economic or fiscal performance for the forty-year period from 1962-2001. We chose 1962 for the starting point as it was the first budget submitted by President Kennedy. Thus, for our purposes, the Kennedy term runs from 1962-1965. The Johnson term runs from 1966-1969, etc. During the forty-year period, each party controlled the White House for a total of twenty years.
In Part I, we looked at the budget deficit. In Part II, we looked at the growth of non-defense employees of the federal government. In Part III, we looked at growth in GDP. In Part IV, we looked at unemployment. In this post, we look at inflation. We got our data here.
Kennedy 1962-1965
During the Kennedy years, the inflation rate as measured by the consumer price index (CPI, all urban consumers) was 1.0%, 1.3%, 1.3% and 1.6%, respectively. Those four years average an inflation rate of 1.3%.
Johnson 1966-1969
During the Johnson years, the inflation rate was 2.9%, 3.1%, 4.2% and 5.5%, respectively. Those four years average an inflation rate of 3.9%.
Nixon 1970-1977
During the Nixon (and Ford) years, the inflation rate was 5.7%, 4.4%, 3.2%, 6.2%, 11.0%, 9.1%, 5.8% and 6.5%, respectively. Those eight years average an inflation rate of 6.5%.
Carter 1978-1981
During the Carter years, the inflation rate was 7.6%, 11.3%, 13.5% and 10.3%, respectively. Those four years average an inflation rate of 10.7%.
Reagan 1982-1989
During the Reagan years, the inflation rate was 6.2%, 3.2%, 4.3%, 3.6%, 1.9%, 3.6%, 4.1% and 4.8%, respectively. Those eight years average an inflation rate of 4.0%.
Bush 1990-1993
During the Bush years, the inflation rate was 5.4%, 4.2%, 3.0% and 3.0%, respectively. Those four years average an inflation rate of 3.9%.
Clinton 1994-2001
During the Clinton years, the inflation rate was 2.6%, 2.8%, 3.0%, 2.3%, 1.6%, 3.2%, 3.4% and 2.8%, respectively. Those eight years average an inflation rate of 2.7%.
Conclusion
For the twenty years in which Republican presidents submitted a budget, the inflation rate averaged 4.96%.
For the twenty years in which Democratic presidents submitted a budget, the inflation rate averaged 4.26%.
Kevin Drum of CalPundit has looked at inflation rates by party of the President for the period from 1948 through 2001. He used “lag times” of 3, 4 and 5 years in assigning responsibility for economic performance to a President. In each case, inflation rate was lower in Democratic administrations than in Republican administrations.
Economic Performance and Political Party of the President
Jane Galt has an interesting post responding to the listing of employment growth by Presidents. The list she cites is similar but not identical to the list I posted. My list:
1) Roosevelt (1933-45): +5.3%
2) Johnson (1963-69): +3.8%
3) Carter (1977-81): +3.1%
4) Truman: (1945-53): +2.5%
5) Kennedy (1961-63): +2.5%
6) Clinton (1993-2001): +2.4%
7) Nixon (1969-75): +2.2%
8) Reagan (1981-89): +2.1%
9) Ford (1975-77): +1.1%
10) Eisenhower (1953-61): +0.9%
11) Bush (1989-93): +0.6%
12) Bush (2001-present): -0.7%
13) Hoover (1929-33): -9.0%
That list is suggestive because job growth was higher under all six Democratic Presidents than under any of the seven Republican Presidents.
Jane rightly argues that too much should not be made from a listing of a single measure of economic performance. She also argues that the data could be misleading for a variety of reasons.
I am pleased with the direction of the argument. Not so long ago, folks like Glenn Reynolds were arguing that “the left’s” economic policies had been shown to be “utterly wrong”. Now the argument is whether the data clearly shows Democratic superiority on economic issues.
There is an old saying in the law that “I’ll take the judgment, you can have the appeal.” In the political/economic debate, I am happy to have the data support my position and allow others to explain why the data is misleading.
I found several of Jane’s arguments to be interesting. For instance, at one point she seems to argue that the results of the job growth data could be the result of random chance:
Just to point out that when you see a little statistic like this, there's usually a bigger picture you're missing. And especially with presidents, where the meaningful data set is far too small to separate out the effects of chance from the effects of policy, it's very hard to draw meaningful conclusions.
While I do not disagree with Jane’s larger point that it is difficult to draw meaningful conclusions from small data sets, what is striking about the job growth data is how clean it is. Job growth was higher under every Democratic President than under any of the seven Republican Presidents.
How large is the possibility that such a dramatic separation would occur through random chance?
If the ranking of a president on the job growth list were random, then the chance that a Democrat would occupy the top spot is 6 in 13. Once that position is filled, the chance that a Democrat would occupy the second spot is 5 in 12. The third spot is 4 in 11 and so forth.
Thus, the probability that every Democrat would outrank every Republican by operation of mere chance is the product of each of those six chances. If my math is correct, the probability of every Democrat outranking every Republican through random chance is about 0.05% or about a 1 in 2,000 underdog. It is not impossible but it is very unlikely that random chance caused the rankings.
Next Jane argues that external factors may have had more influence on the rankings than policy. She is certainly right that external factors may be influential. Jane mentions the following:
Reagan was the unlucky bastard whose Fed chief had to shut down the party by raising short term interest rates to 20% to get the inflation under control, which sadly hurt his employment numbers. Eisenhower too had to induce a recession to tamp down inflation. GBI got the S&L crisis and GBII got a collapsing asset price bubble.
Putting aside the fact that Paul Volker was appointed as Chairman of the Fed by Jimmy Carter, every president faces external factors. Carter, Nixon and Ford faced rising energy prices as OPEC exercised its muscle. Clinton inherited high budget deficits, spiraling health care costs and faced both Asian and Mexican financial crises. It is the job of Presidents to overcome external problems, not use them as excuses for poor performance.
Next Jane argues that the great productivity boom may explain the rankings:
In this century, Democratic power coincided with the long post-war economic boom (and please don't bore me with the "Democratic policies caused it" theory of the boom, since even uber-partisan Democratic economist Paul Krugman will tell you the boom was the result of rising productivity.)
In comments, Jane identifies the years of the productivity boom as 1940-1970. That suggests that Presidents Nixon (mostly), Ford, Carter, Reagan, Bush I, Clinton and Bush II held office after the productivity boom. The rankings of job growth under those Presidents continues to have both Democrats (Carter and Clinton) ahead of each Republican (Nixon, Ford, Reagan, Bush I, and Bush II).
The probability that random chance would rank the two Democrats ahead of each of the five Republicans, in the period after the productivity boom, is less than 5%.
Finally, Jane argues that Democratic Presidents may perform well on a measure of job growth but suffer on other measures:
It (Democratic Presidential terms) also coincided with highly expansionary Keynsian monetary and fiscal policy that pushed down unemployment at the expense of creating inflation.
If Jane is correct that Keynesian policies by Democratic presidents explain the job growth rankings but have other bad economic consequences, then we should be able to easily identify those consequences.
One of the hallmarks of Keynesian economics is the use of deficit government spending to “prime the pump.” Have Democratic presidents submitted budgets that resulted in greater deficit spending than Republicans?
No, they have not. Last fall I looked at budget deficits by the party of the president submitting the budget for the period of 1962-2001. My conclusion:
The twenty years of budgets prepared by Republican presidents increased the national debt by $3.8 trillion. The average yearly deficit under Republican budgets was $190 billion.
The twenty years of budgets prepared by Democratic presidents increased the national debt by $719.5 billion. The average yearly deficit under Democratic budgets was $36 billion.
How about inflation? Once again, last fall I looked at inflation under budgets submitted by presidents of both parties from 1962-2001. My conclusion:
For the twenty years in which Republican presidents submitted a budget, the inflation rate averaged 4.96%.
For the twenty years in which Democratic presidents submitted a budget, the inflation rate averaged 4.26%.
Jane’s larger point is that there is a weak link between presidential policies and any one measure of economic performance and, therefore, we should be very careful not to place too much emphasis on any one data set. Jane is surely correct on that point.
After I became interested in the issue of economic performance by the political party of the president, I looked at unemployment, inflation, GDP growth, overall federal spending and federal non-defense spending, budget deficits, and increases in federal non-defense employees. Others have looked at stock market returns.
The performance under Democratic presidents was superior to the performance under Republicans in each of those measures.
Perhaps all of those measures are flawed in some way or subject to external forces. Perhaps Republican economic theory and performance is not accurately captured by any of those sets of data. If so, there must be some measure of economic performance that puts Republican Presidents in a favorable light. Any ideas on what that measure might be?
Just for the Record Part VI
Growth of Federal Spending
In the Just for the Record series of posts we look at various aspects of economic or fiscal performance for the forty-year period from 1962-2001.
We chose 1962 for the starting point as it was the first budget submitted by President Kennedy. Thus, for our purposes, the Kennedy term runs from 1962-1965. The Johnson term runs from 1966-1969 etc. During the forty-year period, each party controlled the White House for a total of twenty years.
In Part I, we looked at the budget deficit. In Part II we looked at the growth of non-defense employees of the federal government. In Part III, we looked at GDP growth. In Part IV, we looked at unemployment. In Part V we looked at inflation.
We received an e-mail from Aziz Poonawalla of Unmedia requesting that do a Just for the Record post concerning the growth of Federal non-defense spending. We decided to analyze both the growth of total Federal spending and the growth of Federal non-defense spending. For both, we got our raw data here at Table 3-1. The Cogent Provacateur has noted that the data is also available here.
First, we look at the growth of total Federal spending.
Total Federal Spending
Kennedy 1962-1965
During the Kennedy years the growth rate of total Federal spending was 9.31%, 4.20%, 6.48% and a reduction of 0.25% respectively. Those four years average a growth rate of 4.94%.
Johnson 1966-1969
During the Johnson years the growth rate of total Federal spending was 3.79%, 17.05%, 13.13% and 3.09%, respectively. Those four years average a growth rate of 9.27%.
Nixon 1970-1977
During the Nixon (and Ford) years the growth rate of total Federal spending was 6.54%, 7.42%, 9.76%, 6.51%, 9.67%, 23.38%, 11.87% and 10.07%, respectively. Those eight years average a growth rate of 11.73%.
Carter 1978-1981
During the Carter years, the growth rate of total federal spending was 12.10%, 9.87%, 17.24% and 14.77%. Those four years average a growth rate of 13.50%
Reagan 1982-1989
During the Reagan years, the growth rate of total Federal spending was 9.95%, 8.40%, 5.38%, 11.10%, 4.65%, 1.38%, 6.01% and 7.44% respectively. Those eight years average a growth rate of 6.79%.
Bush 1990-1993
During the Bush years, the growth rate of total Federal spending was 9.58%, 5.68%, 4.32% and 2.01% respectively. Those four years average a growth rate of 5.40%.
Clinton 1994-2001
During the Clinton years, the growth rate of total Federal spending was 3.72%, 3.69%, 2.95%, 2.61%, 3.21%, 2.98%, 5.10% and 4.20% respectively. Those eight years average a growth rate of 3.56%
Conclusion
For the twenty years of Republican submitted budgets the average percentage growth of total Federal spending was 7.57%
For the twenty years of Democratic submitted budgets the average percentage growth of total Federal spending was 6.96%.
Next, we look at the growth of non-defense Federal spending.
Growth of Non-Defense Federal Spending
Kennedy 1962-1965
During the Kennedy years the percentage growth of Federal non-defense spending was 13.20%, 6.31%, 10.11%, and 6.01% respectively. Those four years average a growth rate of 8.91%.
Johnson 1966-1969
During the Johnson years the percentage growth of federal non-defense spending was 13.04%, 12.60%, 11.81% and 5.13% respectively. Those four years average a growth rate of 10.65%.
Nixon 1970-1977
During the Nixon (and Ford) years the percentage growth of federal non-defense spending was 12.67%, 15.22%, 15.38%, 11.60%, 12.38%, 29.37%, 14.79% and 10.56% respectively. Those eight years average a growth rate of 15.24%.
Carter 1978-1981
During the Carter years the percentage growth of federal non-defense spending was 13.55%, 9.44%, 17.87% and 13.96% respectively. Those four years average a growth rate of 13.70%.
Reagan 1982-1989
During the Reagan years the percentage growth of federal non-defense spending was and 7.70%, 6.71%, 4.34%, 11.08%, 3.37%, 0.70%, 7.20% and 8.52% respectively. Those eight years average a growth rate of 6.20%.
Bush 1990-1993
During the Bush years the percentage growth of federal non-defense spending was 13.54%, 10.19%, 3.07%, and 3.24% respectively. Those four years average a growth rate of 7.51%.
Clinton 1994-2001
During the Clinton years the percentage growth of federal non-defense spending was 5.53%, 5.38%, 4.10%, 2.78%, 4.01%, 3.10%, 4.71% and 4.09% respectively. Those eight years average a growth rate of 4.21%.
Conclusion
For the twenty years of Republican submitted budgets the average growth rate of Federal non-defense spending was 10.08%.
For the twenty years of Democratic submitted budgets the average growth rate of Federal non-defense spending was 8.34%.
The Democratic Dividend
The stock market prefers Democratic presidents to Republicans. Why?
By Carol Vinzant
Posted Friday, Oct. 4, 2002, at 4:15 PM PT
President George W. Bush inherited the lousy end of the business cycle. The stock market has been falling throughout his entire term, battered by war, a feeble economy, and corporate scandals. Yet this decay still hasn't shaken Americans' faith that Republicans are better for the economy and the market. Poll after poll shows that when Americans divide up the chores of running the country, they tend to think of the economy and stock market as Republican domain and delegate softer issues, like the environment, to Democrats.
But Democrats, it turns out, are much better for the stock market than Republicans. Slate ran the numbers and found that since 1900, Democratic presidents have produced a 12.3 percent annual total return on the S&P 500, but Republicans only an 8 percent return. In 2000, the Stock Trader's Almanac, which slices and dices Wall Street performance figures like baseball stats, came up with nearly the same numbers (13.4 percent versus 8.1 percent) by measuring Dow price appreciation. (Most of the 20th century's bear markets, incidentally, have been Republican bear markets: the Crash of '29, the early '70s oil shock, the '87 correction, and the current stall occurred under GOP presidents.)
According to almanac editor Jeffrey Hirsch, the presidential party figures are among the most significant he's found. If the stock market were random, we'd expect such a result only one-quarter of the time. "I don't know why people are convinced Republicans are good for the stock market," Hirsch says.
Nor does having a Republican Congress help the market. A Democratic Senate showed returns of 10.5 percent (versus 9.4 percent for a GOP upper chamber), and a Democratic House returned 10.9 percent versus 8.1 percent for the Republicans.
When both houses of Congress opposed the president, the return was a stellar 12.9 percent. Libertarians may celebrate this as proof that the market likes gridlock and government inaction. But the market likes steamrollers nearly as much: The S&P performs almost as well—returning 11.8 percent—when the presidency and both houses are held by the same party. The only situation Mr. Market dislikes is what we have now: one house for each party. Those years have a -0.9 percent return.
Republicans are no doubt muttering that that's just the stock market, not the whole economy. But real GDP growth follows the same pattern. Since 1930 (the first year decent data is available), GDP growth was 5.4 percent for Democratic presidents and 1.6 percent for Republicans.
There may be all sorts of explanations for the bias of the economy and the markets toward Democrats. The worst years of the Great Depression occurred under Republican Herbert Hoover, and Democrats got credit for the entire recovery. Democrats had some awfully good streaks of peace and prosperity in the '30s, late '40s, and '90s. These could be chance, or it could be that Democrats more tightly regulate the markets, which gives investors confidence. Democrats are more likely to spread the wealth around through public spending on education or transportation, which may stimulate the economy more broadly. The foundation of recent GOP economic policy—tax cuts—may offer narrower benefits than Republicans claim. High defense spending, another GOP hallmark, may only boost one sector while hurting the whole economy in the form of bigger federal deficits and higher interest rates.
Whatever the reasons for it, this Democratic dividend should encourage the party's 2004 presidential contenders. They have a new slogan to run on: Democrats—the party of Wall Street.
Moneybox thanks economists Susan Woodward and Robert Hall, Ibbotson Associates, and the Stock Trader's Almanac.
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