Why Democrats are Better for the Economy

Nikon AF Nikkor 50mm f/1.8D

08/02/2004 12:33:33 PM · #1

Democrats vs. the GOP: Do the Math
Michael Kinsley

August 1, 2004

You know how sometimes, when it's really, really hot, you get this urge to crank up the old spreadsheet, download a bunch of numbers from the Web and start crunching away like there's no next fiscal year?

Me neither. But I did spend a bit of the past week watching the Democratic convention on TV, and I needed something to exercise my mind while that was going on. Convention season is the one time every four years when we pretend that political parties matter. In general, we have accepted the reality that campaigns for national office have become entrepreneurial, united more by shared political consultants than by old-fashioned parties.

So I thought I'd see if there was a difference between the parties that transcended the differences between the candidates. Is one of them, for example, a better steward of the economy? One year won't tell you much, or even one administration. But surely differences will emerge over half a century or so, if they exist.

With that thought, I headed for the Web. Specifically, I went to the charts attached to the President's Economic Report, released in February. There, I downloaded like a madman and then distilled the mess into a few key stats.

The figures I'm using are from 43 years, 1960 through 2002. I didn't choose the years in order to skew the results; these are the years that were available for the categories I wanted to include.

The results are pretty interesting. Maybe presidents have little power over the economy. And we know that they must fight with Congress over the budget. Still, elections are based on the premise that who you vote for does matter. So let's at least entertain that assumption for a few minutes.

It turns out that Democratic presidents have a much better record than Republicans. They win in a head-to-head comparison in almost every category. Real growth averaged 4.09% in Democratic years, 2.75% in Republican years. Unemployment was 6.44%, on average, under Republican presidents, and 5.33% under Democrats. The federal government spent more under Republicans than Democrats (20.87% of GDP, compared with 19.58%), and that remains true even if you exclude defense (13.76% for the Democrats, 14.97% for the Republicans).

What else? Inflation was lower under Democratic presidents (3.81% on average, compared with 4.85%). And annual deficits took more than twice as much of GDP under Republicans than Democrats (2.74% of GDP versus 1.21%). Republicans won by a nose on government revenue (i.e., taxes), taking 18.12% of GDP, compared with 18.39%. That, of course, is why they lost on the size of the deficit.

Personal income per capita was also a bit higher in Republican years ($16,061 in year- 2000 dollars) than in Democratic ones ($15,565). But that is because more of the Republican years came later, when the country was more prosperous already.

There will be many objections to all this, some of them valid. For example, a president can't fairly be held responsible for the economy from the day he takes office. So let's give them all a year. That is, let's allocate each year to the party that controlled the White House the year before. Guess what? The numbers change, but the bottom-line tally is exactly the same: higher growth, lower unemployment, lower government spending, lower inflation and so on under the Democrats. Lower taxes under the Republicans.

But maybe we are taking too long a view. The Republican Party considers itself born again in 1981, when Ronald Reagan became president. That's when Republicans got serious about cutting taxes, reducing the size of government and making the country prosperous. Allegedly. But doing all the same calculations for the years 1982 through 2002, and giving each president's policies a year to take effect, changes only one result: The Democrats pull ahead of the Republicans on per capita personal income.

As they say in the brokerage ads, past results are no guarantee of future performance.

//www.latimes.com/news/printedition/opinion/la-oe-kinsley1aug01,1,182049.column

David.C

08/02/2004 02:23:31 PM · #2

Originally posted by bdobe:

Democrats vs. the GOP: Do the Math
Michael Kinsley

August 1, 2004

...

There will be many objections to all this, some of them valid. For example, a president can't fairly be held responsible for the economy from the day he takes office. So let's give them all a year. That is, let's allocate each year to the party that controlled the White House the year before. Guess what? The numbers change, but the bottom-line tally is exactly the same: higher growth, lower unemployment, lower government spending, lower inflation and so on under the Democrats. Lower taxes under the Republicans.

...

//www.latimes.com/news/printedition/opinion/la-oe-kinsley1aug01,1,182049.column

In any activity, no matter the size, it takea bit of time for the cause to generate its desired effect. This is just the nature of the universe, and this time-delay is increased with active attempts to prevent the effect from occuring. The larger the effect desired, which basically seems to come down to 'how many people are involved,' the longer the delay will be. On a national basis that delay, for economic change, is somewhere in the range of 4-6 years -- not the one Mr. Kinsley so generously provided. I would be interested to see how the results turn out with a more realistic time-delay is taken into account -- but then again, I would have been interested in the results obtained by the single year delay he calculated to see just how effective a president can be in his first year. But that wouldn't be working toward his agenda, and there is nothing more worthless than statistics generated to support an agenda. :(

David

Nikon AF Nikkor 50mm f/1.8D

08/02/2004 02:38:25 PM · #3

Don't forget to include the following paragraph:

But maybe we are taking too long a view. The Republican Party considers itself born again in 1981, when Ronald Reagan became president. That's when Republicans got serious about cutting taxes, reducing the size of government and making the country prosperous. Allegedly. But doing all the same calculations for the years 1982 through 2002, and giving each president's policies a year to take effect, changes only one result: The Democrats pull ahead of the Republicans on per capita personal income.

David.C

08/02/2004 03:01:36 PM · #4

It is still 'generously' giving only a single year in which to effect a change in an already moving economy.

To put it into more personal perspective, scale it down to the size of a family. Assume the family is deep in debt (the US isn't, but we will work from that assumption anyway), and like all debt it is the result of a fiscal policy -- even if that policy is not stated explicitly anywhere.

Now that family wants to get out of debt and save up for vacation, retirement or whatever. Fiscal policies are changed, but when does the effect of that change in fiscal policy come about? Check back in on them in a couple of weeks and there will likely not be much change (they will notice it, but probably not an outsider), 4 to 6 months and the change will be starting to take shape. But, even for something as small as a family, in comparison to the size of a nation, is going to take take a year and probably more before their change in lifestyle can be said to have run its full course.

Compound this with the natural tendency to resist freaquent change and things start looking much more realistic. A freaquent change would be the previous family changing goals and fiscal planning every 4 to 8 months -- after a while, the members just stop caring about the planning and continue doing what they have always done while pretending to follow the 'plan'.

It is the curse of our fore-fathers that our economy is crippled with the short-sightedness of the current presidential term length.

David

Canon 12x IS USM (S3 IS built-in Lens) -- 36-432mm (35mm EQ)

08/02/2004 03:20:24 PM · #5

Originally posted by Britannica:

To put it into more personal perspective, scale it down to the size of a family. Assume the family is deep in debt (the US isn't, but we will work from that assumption anyway), and like all debt it is the result of a fiscal policy -- even if that policy is not stated explicitly anywhere.

So $7,316,567,571,232.89 doesn't count as deep in your book ? :) (though, given that that value is 2 days old, it is probably a few billion dollars out...)

GeneralE

Canon PowerShot S3 IS

08/02/2004 03:20:57 PM · #6

Originally posted by Britannica:

Assume the family is deep in debt (the US isn't, but we will work from that assumption anyway),

From the US Treasury Department:

The Debt To the Penny
Current Amount

07/30/2004
$7,316,567,571,232.89

Any "deeper" and we'd surely have reached Hell ...

Message edited by author 2004-08-02 15:21:50.

GeneralE

Canon PowerShot S3 IS

Canon 12x IS USM (S3 IS built-in Lens) -- 36-432mm (35mm EQ)

08/02/2004 03:24:59 PM · #7

Originally posted by Gordon:

So $7,316,567,571,232.89 doesn't count as deep in your book ? :) (though, given that that value is 2 days old, it is probably a few billion dollars out...)

The other site I checked says the increase is about $1.69 Billion/Day since sometime in early 2003.

Each citizen's share (if divided equally) is about $24,900.

08/02/2004 03:28:13 PM · #8

Originally posted by GeneralE:

Each citizen's share (if divided equally) is about $24,900.

and if any of you citizens want to pay your share, again from the US Treasury :

Please follow these important steps to make a contribution to reduce the debt.

1. Make check payable to the "Bureau of the Public Debt"
2. In the memo section of the check, make sure you write "Gift to reduce the Debt Held by the Public "
3. Mail check to -

ATTN DEPT G
BUREAU OF THE PUBLIC DEBT
P O BOX 2188
PARKERSBURG, WV 26106-2188

Message edited by author 2004-08-02 15:28:23.

08/02/2004 03:29:02 PM · #9

And getting worse since the Bush administration assumed office:

WASHINGTON - The federal government is heading toward a record $480 billion deficit in 2004 and will rack up red ink of almost $1.4 trillion over the next decade, according to the latest analysis by the Congressional Budget Office.

//www.foxnews.com/story/0,2933,95663,00.html

08/02/2004 03:34:00 PM · #10

Originally posted by bdobe:

The original budget proposal in March targetted around $521 billion budget deficit - so things have improved (!) Certainly a great time to give everyone some money in a tax refund... You'd think it was an election year or something.

08/02/2004 03:52:59 PM · #11

So what "Key States" were used? This could greatly skew the the numbers?

As said above, things done by President A may take 6 years to have a seen outcome.

Current economy: Not only is President Bush not responsible for today's economy, but neither is Clinton... Don't give the Presidents so much credit, they are not powerfull enough unless they really fuck up.

Does anyone here have a clue what the defincit really is and how it's used and how if we didn't run one we would never recover?

BTW: Time and time again, a zero debt economy has been proved to be an unsuccessful and economy crashing model... And don't give me this, well the right people just haven't tried it yet, the Far left has been arguing the same point about socialism, communism & Marxism for years.

08/02/2004 03:54:38 PM · #12

Oh ya, and one more thing...

No matter who is president and who is in control, we will be having the same economy discussions in 10-13 years.

08/02/2004 03:57:38 PM · #13

Originally posted by Russell2566:

BTW: Time and time again, a zero debt economy has been proved to be an unsuccessful and economy crashing model... And don't give me this, well the right people just haven't tried it yet, the Far left has been arguing the same point about socialism, communism & Marxism for years.

There is a difference between zero debt and mismanaged debt. Certainly borrowing makes sense in a lot of cases, but you still have to finance that debt, pay the interest and so on. Willingly increasing the debt by ever larger budget deficits is about as responsible as spending the maximum on all your credit cards every month, while acquiring new cards as quickly as possible as well.

Or as you own a small business, consider borrowing more and more money every month from your bank. You still have to pay those interest charges. Now if you are turning those loans in to profits at a higher rate than the interest, then there is potential value on this - but it becomes an ever higher house of cards.

But in general you are right, the current president is almost always in it for the short term, and will be out of office before the blame hits the fan - so why do anything to pay down the debt ?

Message edited by author 2004-08-02 16:02:30.

08/02/2004 04:03:26 PM · #14

Originally posted by Russell2566:

So what "Key States" were used? This could greatly skew the the numbers?

Please re-read the article. The author refers to stats, not states:

"With that thought, I headed for the Web. Specifically, I went to the charts attached to the President's Economic Report, released in February. There, I downloaded like a madman and then distilled the mess into a few key stats.

The figures I'm using are from 43 years, 1960 through 2002. I didn't choose the years in order to skew the results; these are the years that were available for the categories I wanted to include."

And read this for a working definition of deficits:

//usgovinfo.about.com/library/weekly/aa101500b.htm

MadMordegon

08/02/2004 04:37:07 PM · #15

Originally posted by Britannica:

It is the curse of our fore-fathers that our economy is crippled with the short-sightedness of the current presidential term length.

I think that when they had the 4 year term in mind they thought it would be best for consistent change, which I agree with even more today. The GOP view (Grand Old Party) is that of being conservative, meaning to resist change.
Considering "rock oil" had not been discovered yet, the fore fathers were ahead of their time in thought. If they knew the speed in which the world societies and US especially, advanced in the last 100 years, they probably would have made the term 2 years.

Never in human history did things around the world change so rapidly. It takes a moving forward way of thinking to keep up, not a "good ol' days" way of thinking. The �good ol� days� are gone.

Besides, terrorism is a new threat; old ways of dealing with national security and world threats don�t apply anymore.

As much as we humans tend to resist it, change is not only constant, but good.

imolaavant

Canon EOS-300D Rebel

08/02/2004 04:46:56 PM · #16

Originally posted by Britannica:

...On a national basis that delay, for economic change, is somewhere in the range of 4-6 years -- not the one Mr. Kinsley so generously provided. I would be interested to see how the results turn out with a more realistic time-delay is taken into account... But that wouldn't be working toward his agenda, and there is nothing more worthless than statistics generated to support an agenda. :(

David

So when Mr. President three days ago in Springfield, Missouri said...

"Because we acted, our economy since last summer has grown at a rate as fast as any in nearly 20 years. (Applause.) Because we acted, America has added more than 1.5 million new jobs since last August. (Applause.) Because we acted, Missouri has added more than 82,000 jobs over the past 11 months; your unemployment rate is now 5.2 percent. (Applause.) When it comes to creating jobs for America's workers, we are turning the corner and we are not turning back. (Applause.)"

... he is obviously misleading the public by taking credit for something he had absolutly nothing to do with. No?

Edit: for clarity & to add location of Bush Speech

Message edited by author 2004-08-02 16:51:44.

08/02/2004 04:49:35 PM · #17

Originally posted by imolaavant:

... he is obviously misleading the public by taking credit for the growth he mentions. No?

Haven't you paid attention to politics before ? You take credit for anything good that happens (regardless if it is your fault or not) and blame previous administrations for anything bad that happens (regardless if it is their fault or not)

This isn't unique to the Bush dynasty.

Message edited by author 2004-08-02 16:50:08.

imolaavant

Canon EOS-300D Rebel

08/02/2004 05:05:17 PM · #18

Originally posted by Gordon:

I'm quite aware of that, I just want to hear David, who happens to live in Missouri, either agree that Bush is wrongfully taking credit, or that his original 4-6 years comment was simply "statistics generated to support an agenda"

Nikon AF Nikkor 50mm f/1.8D

08/02/2004 10:48:48 PM · #19

Bush policies have helped things grow and get kicked off... But he is not responsible for the economy in a massive way like say a CEO...

BUT, then again, if the democrats want to keep on running ads saying that president bush has ruined the economy and president bush has cause hundreds of thousands of people to loose their jobs, then he must also be soly responsible for getting them back and bringing back the economy, right?

We certainly know the Democrats didn't do much/anything to help.

Personaly, after all the things that have been said about America and the bitching from the UN, NATO & The AIDS meeting on Africa last month or so and other socialist countries, I'd say lets stop giving money to countries who obviously don't appreciate our over generosoity and pay off the debt with it... Fuck em as far as I'm concerned... I've become very hostile twords other countries in the last 2 years...

Message edited by author 2004-08-02 22:49:42.

David.C

08/03/2004 03:44:11 AM · #20

Originally posted by Gordon:

... So $7,316,567,571,232.89 doesn't count as deep in your book ? :) ...

The GNP is still larger. I don't know about you, but most of the families I know that consider themselves in deep owe quite a bit more than they make in a single year. Why isn't it paid off? Easy, each administration that comes into office have plans for the future, but those plans require funds to get moving. This borrowing is investing in the future the plans are designed to accomplish. Unfortunately, before the plans can be pushed to completion the administrations term ends and the new administration takes control. But wait, they also need funds to jumpstart their plans for the future. Lots of things get started, but the benefit they were designed to accomplish dies when the push to accomplish them is removed. The last time an administration had enough time to push its plans close to completion was in the Reagon/Bush era -- in that 12 years there was a lot accomplished, and the economy rode a high wave that took Clinton 6 years to slow down and another 2 to bring to a stop.

---

Originally posted by imolaavant:

... I just want to hear David, who happens to live in Missouri, either agree that Bush is wrongfully taking credit, or that his original 4-6 years comment was simply "statistics generated to support an agenda"

I'm not quite sure what you are trying to accomplish with this. You seem to be under the assumption that I am anti-Democrat or pro-Republican, when actually I couldn't care less about all that 'party' non-sense.

Sure Bush is telling it like the public he is addressing wants to hear it. It is an election year, and if he doesn't win everything he has worked for will be swept away and the whole cycle started over again -- just one more aborted plan for the future. I don't particularly agree with everything he wants to accomplish, but that is of little importance to what I am saying.

All administrations have things that can be pointed up about them, both good and bad. That's just the way it is when dealing with things 'human'. I am just tired of being under a neurotic government, with all the partially finished projects laying about, clogging up the works with a lot of red-tape that must be cut through to get anything accomplished. Seriously, when was the last time you heard of a bill making it through congress without having items added to it, designed to push forward some portion of a plan that has long since become leaderless. But that isn't an issue with any single administration; it's not even a 'party' issue. It is a constitutional issue. If you think about it for a while, it is easy to see how the 'party' system was inevitable side-effect of the short-terming of the administration of this country -- those with plans getting together with others, and grooming future canidates, to push forward plans that are at least remotely similar.

David
The whole thing is a mess!

08/03/2004 07:55:04 AM · #21

I propose a 6 year Presidential term limit with a new rule that it is illegal to run consecitivly. ie Bush couldn't run in 2004 but he could in 2008... The simple fact of time involved would keep a person from running more than 2, maybe 3 times of he/she/it started out really early in life.

Further more, it is illegal to do any significant (tough definition) campaigning for your self or the person planing on running for President in the next election while in the office.

This could turn the Presidents effective length from somewhere around 2.5 years to more like 5.2ish, taking into account both incoming and outgowing problems of a Presidency.

08/03/2004 08:35:31 AM · #22

France recently (2000) changed its electoral policy and presidential term from 7 years to 5 years, to encourage more democratic participation.

MadMordegon

08/03/2004 10:41:08 AM · #23

Originally posted by Russell2566:

Personaly, after all the things that have been said about America and the bitching from the UN, NATO & The AIDS meeting on Africa last month or so and other socialist countries, I'd say lets stop giving money to countries who obviously don't appreciate our over generosoity and pay off the debt with it... Fuck em as far as I'm concerned... I've become very hostile twords other countries in the last 2 years...

As humans living in a time of a world economy, where the world is now very small and we are no longer protected by vast oceans, your attitude will move us in the wrong direction.

08/03/2004 01:29:25 PM · #24

Originally posted by MadMordegon:

As humans living in a time of a world economy, where the world is now very small and we are no longer protected by vast oceans, your attitude will move us in the wrong direction.

There are many things wrong with my angry reply... But can anyone honestly say that were going in the right direction now? I'm tired of giving my tax dollars to people who don't appreciate it.

When you get a gift at Christmas, you don't look at the giver and say "WTF! I expected MORE", and I would like to think that we could expect more from countries or groups like NATO & The UN than from a 5 year old...