About a week ago, I had a post looking at real disposable personal income less the increase in each person’s future tax obligation throughout the year. (What a mouthful. Maybe I should call it RDPILCiD, which seems to have a catchy ring to it.)
In another thread, reader One Salient Oversight asked what some of the series I’ve been graphing would look like if measured in foreign currency. I took the Fed’s price adjusted broad dollar index, and determined how much it changed over time by dividing it by the value it had in 1973 at the start of the fiscal year, and then multiplied that by the RDPILCiD, creating the (even more catchily-titled series) RDPILCiDPABDI. (Its like poetry!)
As an example, in 1973, the price adjusted broad dollar index it had a value of 97.592. In 1974, it was 94.361. Similarly, in 1973 the RDPILCiD had a value of 15,271, and in 1974, it had a value of 15,637. Thus, the RDPILCiDPABDI was equal to 15,271 in 1973, and 15,637 * (94.361/97.592) = 15,119 in 1974.
What this series shows is one’s real disposable income, subtracting off one’s share of the change in federal debt, all measured using a broad index of price adjusted foreign currency. Put another way… it gives us an idea of how each of us doing relative to foreigners. The data only goes back to 1973 – when the Bretton Woods system collapsed.
The Table below summarizes the results, showing the annual percentage change in the series under each President.
Something I should note… until 1976, fiscal years ran from July to June. Since then, they’ve run from October to September. Put another way, the 1975 fiscal year ended in June of 1976. The 1976 fiscal year began in September. In my previous looks at this sort of data, I failed to take into account this wedge. This time (and forever more with fiscal year data), I figured out how to do it. The change is insignificant, but it does add a small amount of precision. The result… notice that the figure that applied to the start of Carter’s term is not quite the figure that applied to the end of Nixon/Ford’s.
Anyway, long story short… Clinton does best, followed by Reagan, then Carter. The other 3 (Republican) administrations all show losses.
Data and methodology notes…
Disposable personal income data is available from the BEA’s NIPA Table 2.1. Data on the Federal Debt was obtained from White House OMB Table 7.1. Because the data is for the end of the fiscal year (which ran through June until 1976, and until September in subsequent years), and the disposable income is provided quarterly, I used 2nd quarter real disposable personal income per capita through 1976 and 3rd quarter thereafter. In addition, I adjusted using the average of 12 consecutive months’ CPI-U CPI-U to compute inflation. To match the other series, the twelve months ended in June for years through 1976, and in September for years thereafter.
If you want my spreadsheet, let me know.