This post is one I should have written a long time ago… it looks at revenues, outlays, and deficits (or surpluses) over time since the early 1930s, breaking things out by Presidential administration. All data for this comes from White House Office of Management and Budget Table 1.3.
I note… I have already looked at taxes, kinda… I had a post looking at non-SS taxes less increase in tax obligation by President, the idea being that SS has a separate revenue stream, and that increases in the national debt must eventually be paid and hence represent “deferred taxes.” In this post, I’m going for the classical definition of federal revenues… including everything, and ignoring the future debt obligations.
So, without further ado, here are three graphs: federal receipts as a percentage of GDP, federal outlays as a percentage of GDP, and surplus or deficit as a percentage of GDP.
Here are summary tables…
Note… the summary table for the surplus does not show the annualized change. Given in some administrations, the surplus becomes a deficit, and in others, the opposite is true (i.e., figure go from positive to negative or vice versa), the concept of an annualized change doesn’t work mathematically. As a result, the summary table for the surplus shows the percentage change over the entire period divided by the number of years.
So what do we learn?
1. Revenues always drop when Reps are in office, and under every single Republican administration, revenues dropped by more than they did under JFK/LBJ, the only Dem administration under which revenues dropped. Even Reps that didn’t “cut taxes” see drops in revenues as a percent of GDP. (GHW is the classic example.) What gives? Well, as I noted before, there are many ways to cut taxes, and announcing a tax cut is only one of many. One can simply cut enforcement at the IRS and achieve the same results.
2. Actual declared tax cuts by Reps are easy to spot. After an actual declared tax cut, tax revenues fall off a cliff in Republican administrations.. spotting the tax cuts under Reagan and GW is child’s play. One interesting thing… the entire drop in revenue is not permanent after such tax cuts… there was a bit of increased growth in the economy, eventually. Not enough to result in growth rates like those of JFK/LBJ or Clinton, but growth rate nevertheless.
3. People often attribute all that is good in the Clinton admin to the Republican Revolution. Well, let’s see… Reps took over Congress in 1995… what changed? The pattern of tax revenues? Um, no. The spending pattern? Not that either. The combination of the two? Well, that didn’t change either. And what changed from 2000 to 2001, when the Republicans still ran Congress, but Clinton left office? Hmmm… well, tax receipts, spending, and the direction of the surplus all changed. So to conclude that the Rep Congress was responsible for what happened in the Clinton admin, one has to conclude that it started having an effect from 1992 to 1993, and ceased having an effect from 2000 to 2001 and was unrelated to the fact that them’s the years that by random coinkidink bracket the Clinton administration. Not that pointing this out would make a whit of difference to those who know the truth because they don’t believe in data anyway. I believe the correct response, to one who knows the truth, is: “Woohoo, Reagan rocks!!!!!” or some such thing.
4. Does Congress have an effect elsewhere? I am no historian, but I believe the following table is accurate when it comes to showing the dates when each party held control of the Senate and the House since 1953.
In 1955, Dems took control of Congress. There does seem to be a big change in revenues – I’m not sure I can explain it. What about 1981 – well, its hard to attribute changes that year to Congress given the new President, Reagan. But in 1987, we do spot… a big rise in revenues, and a big drop in spending, resulting in a big drop in the deficit. We’ve been over 1995 already.
5. What about spending? Well, it really doesn’t seem like most Presidents were tight with the money. Clinton cut spending substantially, Ike by half as much, and Reagan by a quarter of Ike’s rate. But otherwise, the pattern has been to spend and spend and spend. No doubt its Bush Derangement Syndrome to point this out, but GW is currently in 7th, just ahead of JFK/LBJ.
6. Putting it all together… the most fiscally responsible President, by far, was Clinton – he improved the country’s books by 7X what Carter did, who in turn did twice as well as Ike. The rest of the Presidents made the debt situation worse, not better. And bringing up the rear are the Bush boys, with GW being off some distance from the rest. Of course, it’s not really a problem… its merely a sign of my acute and no doubt terminal Bush Derangement Syndrome that I would notice something like this because as we all know, Bush is the bestest President ever.
Update… I just noticed, there’s a small mistake in the last graph… From 2001 to 2003, control of the Senate changed hands a few times, and was deadlocked for a while. That should be characterized as mixed control. Apologies.