Which Party’s Presidents Created The Debt? Anyalysis From 1938 – 2004

The chart below shows the United Stated national debt (per Microsoft’s Encarta Encyclopedia[1]) with the various Presidents’ terms marked by vertical lines. Under Clinton the growth in debt ceased, but note the radical change in direction debt has taken since George W. Bush entered office. There is no question that the steepest upward rises in debt take place when Conservative Republican Presidents are in office (see red below).

Since 1938 the Democrats have held the White house for 35 years, the Republicans for 31. Over that time the national debt has increased at an average annual rate of 8.9%. The Democratic yearly average (that is the years Democrats were in the White House) was an increase of 8.7%. The years while the Republicans ran the White House, during this same period; the debt increased an average 9.1% per year. Those averages are pretty close.

If you look at the debt starting with Truman’s term (and remove Roosevelt’s WWII debt) the difference between the two parties contributions to our national debt level change considerably. Since 1946 the Democratic Presidents increased the national debt an average of only 3.7% per year when they were in office. The Republican Presidents stay at an average increase of 9.1% per year. Over the last 57 years Republican Presidents have out borrowed Democratic Presidents by more than a two to one ratio. That is, for every dollar a Democratic President has raised the national debt in the past 57 years Republican Presidents have raised the debt by $2.47.

Prior to the Conservative take over of the Republican Party there was not much difference between the two parties debt philosophy, they both worked together to minimize it. However the debt has been on a steady incline ever since the Reagan Presidency. The only exception to the steep increase over the last 23 was during the Clinton Presidency, where he brought spending under control and the debt growth down to almost zero.

Comparing the borrowing habits of the two parties since 1981, when the Conservative movement really took hold, it is extremely obvious that the big spenders in Washington are Republican Presidents. Looking at the only Democratic President since 1981, Clinton, who raised the national debt an average of 4.3% per year; the Republican Presidents (Reagan, Bush, and Bush) raised the debt an average of 10.8% per year. That is, for every dollar a Democratic President has raised the national debt in the past 23 years Republican Presidents have raised the debt by $2.52. Any way you look at it Conservative Republican Presidents can not control government spending, yet as the graph above clearly shows, Clinton did.

Truman, Eisenhower and Kennedy all worked vigorously to keep spending under control. Of the seven years Truman was in office, the national debt came down in four of those years. Three of the eight years Eisenhower served as President saw debt reduction. Kennedy reduced the debt by over 4% his first year in office, then it went up slightly his next two years. While the debt did go up every year during Johnson’s time in office, he was the last president before Clinton to submit a balanced budget. Johnson’s average was a debt increase of 3% for the five years he served.

Even Nixon only had one year where he raised the debt more than 6%, his average was 5% for the six years he was in office. Between uncontrolled inflation and Ford’s conservative bend the debt increased 17% his first year in office, 13% his second. Ford also had a policy imposing price controls that failed.

Carter tried to control government spending even during inflationary times. He increased the national debt 9% per year while he was in office, and started to bring inflation under control.

President Reagan repeatedly called for a balanced budget amendment to the Constitution, yet never submitted a balanced budget himself. Many blame the Democratic Congress for the “big spending” during his administration. The facts are that Reagan was able to push his tax cuts through Congress, but he never pushed through his reduced spending programs. His weak leadership in this area makes him directly responsible for the unprecedented debt increase that took place during his time in office. The debt increased at an average of 13.8% for every year Reagan was in office, the highest average of any President since this nation was founded, and he still holds that record. From 1983 through 1985 the debt was increasing at over 17% per year. While Reagan was in office this nation’s debt went from just under 1 trillion dollars to over 2.6 trillion dollars, a 260% increase. The sad part about this increase is that it was not to educate our children, or to improve our infrastructure, or to help the poor, or even to finance a war. Reagan’s enormous increase in the national debt was not to pay for any noble cause at all; his primary un-apologetic goal was to pad the pockets of the rich. The huge national debt we have today is a living legacy to his failed Conservative economic policies. This unwanted weight continues as an onerous burden on this nations financial resources.

George Bush Sr. meekly followed in Reagan’s shadow, by increasing the debt on average a mere 11.8% a year during his four years as President. His last year in office he worked with Democrats to raise taxes to help reduce the massive yearly increases in debt, it was too little too late and didn’t make much difference in the overall trend, but the Conservatives threw him out of office for it any way.

President Clinton inherited the deficit spending problem and did more than just talk about it, he fixed it. In his first two years and with a cooperative Congress he set the course for the best economy this country has ever experienced. Then he worked with what could be characterized as the most hostel Congress in history for the last six years of his administration, yet he still managed to get the growth of the debt down to 0.32% (one third of one percent) his last year in office. Had his policies been followed for one more year the debt would have been reduced for the first time since the first year of the Kennedy administration.

The current President Bush came into office and quickly turned all that progress around. He immediately gave yet another massive tax cut based on a failed economic policy. The last year Clinton was in office the nation borrowed an additional 18 billion dollars, the first year Bush Jr. was in office he had to borrow 270 billion. The tax cut that caused this borrowing was supposed to stimulate the economy, but two years later Bush had to push through yet another tax cut. The second tax cut was needed because it was clear that the first one did not work. Economic history tells us the second one won’t work either. As a result of all this tax cutting and no cutting in what he is spending Bush will set a record in 2003 for the biggest single yearly increase in debt in the nation’s history, by his own estimations he will break this record again in 2004. The debt is now increasing at the rate of 500 billion dollars a year[2]. Even Reagan never increased the debt that much in a single year; Reagan’s biggest increase was only 282 billion, half of Bush’s outrageous spending. As a result of the fact that the debt was already pretty high when Bush Jr. entered office his annual rate of increase is only averaging 7% per year, so far.

History has shown that the “trickle down theory” does not work. Hoover tried the “trickle down theory” (his words) to solve the economic problems the last few years of his only term, when the greatest economic depression this country has ever faced began, it did not work and things got worse. Roosevelt got into office, raised taxes on the rich, created jobs for the poor and turned things around. Reagan employed the failed theory again in the ‘80’s and again it did not work. The rich got richer, but the poor got poorer and so did the economy. Bush Sr., with no vision of his own, continued the failed policy of his immediate predecessor. Clinton took a more progressive approach and turned the model upside down. Instead of making the rich richer in the hope that they will spend that money and thus create demand and therefore jobs, he created a tax environment that encouraged the creation of jobs and created an economic environment where everyone could get rich, not just a few, and it worked. Lots of jobs and lots of new millionaires were created while he was in office. Bush Jr. came in and once again applied the old trickle down model and immediately created a need to raise the debt to pay for an unneeded tax cut in 2001. Predictably the nation is now loosing jobs and there are fewer millionaires. Not learning from his past mistakes Bush pushed through yet another tax cut in 2003. Since he is not learning from his mistakes, it is apparent that we must teach him an obvious lesson in the next election; you screw up the economy you do not get or deserve a second term.

While it is a great sound bite, the facts show that the Republican “tax and spend” rhetoric about Democrats is not based on the facts. The facts do show that it takes a Democratic President to control and reduce spending. The truth is that the Republicans are the party of “borrow and spend”. They hate taxes, but love to spend; their solution is to put off till later paying for their security today, they prefer to see our children pay our taxes. Conservative thinking has run up over a 6 trillion dollar debt that will not be paid off for a generation or more, and it is still increasing at a record setting rate with no end to the increases in sight.

In 2002 the debt tax was eighteen cents out of every federal tax dollar. This tax is used to pay the interest on the existing national debt, and puts nothing toward principal. If Conservatives really want to lower our taxes, they should lower the debt tax. That would insure a permanent tax cut for the whole country (but it would not help them with their apparent goal to further concentrate the nation’s wealth in the hands of a few).

There has been an interesting transition taking place in the nation’s political parties over the last 20 years. Back when Reagan was elected the first time the majority of the Republican Party believed in responsible spending. Controlling government spending was one of the major grass roots objectives that Reagan touted in his many campaign speeches, it use to be a Conservative pillar. The Democrats wrongly defended deficit spending at the time. Once Reagan got into office he kept talking about needing a balanced budget amendment to the Constitution. Yet all the while he was giving lip service to the idea of smaller government, behind our backs he was growing it to unprecedented size, giving tax cuts to the rich and astronomically increasing the debt. He obfuscated the issue so well that here we are 23 years later and it seems the only party that got the message was the Democrats, both at the grass roots level and at the national level. Most of the folks talking about responsible government spending these days are Democrats, and the Republicans are curiously silent on the issue of debt reduction (and term limits). Where have all the Republican deficit hawks gone?

This missive is clearly biased against deficit spending, but getting past the rhetoric certain facts still stand. Since the Conservative movement has become the dominate force in the Republican Party the national debt has grown and continues to grow at unprecedented rates. In addition experience has shown that “trickle down tax cuts” only work to concentrate the nation’s wealth into fewer hands and never help to rebound the economy.

Fortunately our nation is fundamentally strong and it has always had the strength to overcome bad Presidents and their failed economic policies in the past; it can and will endure the downward vortex of this misguided Conservative trend as well. However, for the sake of our nation and our jobs, let us all hope that we see an end to the dominance of the disastrous Conservative economic polices soon.

[1] The debt totals in Encarta show the actual amount of money borrowed by the United States in a given year.

This total is often different, and typically larger than the total a given budget might have stated. Budgets are planning documents; the borrowed totals given here are what actually happen. That is why even though the proposed budget was balanced during Bill Clinton’s last few years, the debt shown here shows an increase. The budget was balanced but the nation still borrowed more money than the budget predicted, or the treasury brought in.

[2] In 2003 Bush’s increase of the debt will be 26 times greater than Clintons last year in office, 462 billion v. 18 billion. In a matter of only two years spending has gotten completely out of control.

This is taken from “An Analysis of the Presidents Who Are Responsible For Excessive Spending”, by Steve McGourty. The original page for it was here;

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

But since it is no longer up I wanted to share it with you here.

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