The Republican Party and the National Debt
Mike Kimel from Angry Bear 2007 described another aspect to be kept in mind during the current austerity policy debates.
The Republican Party and the National Debt
Posted by cactus | 12/04/2007
Public Agenda is asking bloggers to contribute to a discussion on the National Debt they call Facing Up. These are my thoughts on the subject…
The White House’s Office of Management and Budget Table 7.1 shows data on the National Debt going back to 1940. There’s gross debt, debt held by the public, debt held by Federal Government Accounts, and debt held by the Federal Reserve. And the data is provided in dollars and as a percentage of GDP. The size of the debt looks different depending on which measure one chooses.
So what is the most useful way to look at the size of debt? Well, on the one hand, you don’t want to count money owed from one branch of the Federal government to another, so debt held by the public makes more sense than gross debt. Furthermore, if the average person borrowed $1 million, they’d have some trouble paying it back, whereas Bill Gates would have no such issues. Therefore, debt as a percentage of income makes more sense than debt in dollars.
With all that said, here’s what Debt held by the Public as a percentage of GDP looks like, going back to 1940:
The graph indicates that debt exploded with the start of World War 2 – by 1946, the debt, at 109% of GDP, was almost two and a half times greater than it was in 1940. Presumably, a country fighting for its collective life could be excused in taking such a financial gamble.
After World War 2, the debt declined until 1974, bottoming out at just under 24% of GDP. Since then, its generally risen… quickly in some years, not so quickly in others. What’s the cause of this? No doubt there are many, but one cause is obvious, when you play with the data a wee bit. The graph below shows the Debt held by the Public as a percentage of GDP in the last full year of each Presidential administration, color coded by Political Party, following the end of World War 2:
And here is a slightly different look – the next graph shows the annualized percentage change in the Debt held by the Public as a percentage of GDP from the end of one administration to the end of the next:
Note… a negative decrease in the debt is, obviously, an increase in the debt.
The last five Democratic Presidents, Clinton, Carter, LBJ, JFK, and Truman all reduced the debt, and one has to go back sixty years to find a Democratic President who, facing the Great Depression and World War 2, allowed the debt to increase. On the other hand, the last four Republican Presidents, GW Bush, GHW Bush, Reagan, and Ford all oversaw an increase in the country’s indebtedness. It has been more than thirty years since a Republican President left office (albeit in a scandal) having reduced the National Debt. In the last few decades, somewhere along the way, the Republican Party has become the Party of fiscal irresponsibility.
It doesn’t have to be that way. Lord knows I’m no Republican, and it seems to me that many of what currently seem to be core Republican policies appear almost designed to increase the debt. Even so, there’s still something in the Republican DNA that believes fiscal responsibility is a good thing. All else being equal, Republican voters appear to prefer a lower debt over a higher one, and they seem to believe (even if that belief is mistaken) that they are more likely to get it from Republican politicians. President Bush himself, in the Economic Blueprint for his Presidency, promised to retire “an historic $2 trillion in debt over… 10 years.” His debt-fighting plan was so ambitious that he expected annual surpluses to “outstrip the amount of maturing debt starting in 2007.”
But as he said elsewhere in his Economic Blueprint,
Government must be results-oriented—guided not by process, but by performance. There comes a time when programs must be judged by how well they achieve their purpose. Where we find success, we should reward it, and make it the standard. Government action that fails in its purpose must be reformed or ended.
Its time to apply that standard to the policies that Republican politicians promise us will reduce the debt.
Kimel
This is an excellent post and sorely needed to clarify the inconsistencies expressed by the political class. Simple and to the point, based on factual data and including easily understood graphics.
Too bad that no member of the political class seems to give a damn. These points have been made time and again, by yourself and others. The stated arguments by both Republicans and Democrats make no use of the argument you set forth so clearly. Hence my use of the term political class rather than one party or the other. Obviously something is amiss when such easily understood ideas are not only dismissed by the policy makers, but outright ignored. Apparently the facts of the matter, any matter up for political debate, do not matter. Whether it be the economy, the funding of government activities or the musings of the current Supreme Court over basic Constitutional issues, the facts don’t count. What’s is the correct path is what I say it is seems to be the argument of the day.
But nice try any way. And I do respect your efforts in regards to these issues. I will be sure to forward a copy of your post to the members of Fix the Debt so that they may consider the facts. That is, if and when the facts take on some importance to that group of shills and their leader, Madame Shill and her benefactor, the Grand Shill.
I have similar charts on my blog, showing the data back to 1971 as (calendar) quarterly rather than annual deficits.
http://sustainablestate.blogspot.jp/2013/03/red-up-blue-down.html
I note that you use the “last full fiscal year”, which means Bush only gets credit for one quarter of one year of the manure storm he ignited, for example.
Jack,
Thanks for the kind words.
Chad Brick,
The post was written in Dec of 2007. Figures for 2007, let alone 2008, weren’t available at the time. So yes, Mr. Bush didn’t quite get the credit he deserved. I didn’t realize we were in a recession and have my first post about the recession until March of 2008 (i.e., the early days of the Kudlow “Goldilocks economy” storyline) or perhaps the tone of this post would have been more acerbic.
Part of the reason I decided to go through the painful process of extracting the quarterly data was precisely because I wanted to make it clear what happened in late 2008, and then went nuts and kept extending it backwards. Obviously, the 2008+ data wasn’t available when the angrybear post was written, but even if it was, it would have had the same problem of blurring what happened as the bubble burst. There is a lot of confusion around fiscal vs calendar years out there.
One factoid that I like to point out is that Bush ran a $1.1 trillion dollar deficit in his last 180 days. That is not an annualized figure.
Mike
“you don’t want to count money owed from one branch of the Federal government to another,”
not quite. some of that debt is owed to Social Security, which is in fact debt owed to the public disguised as debt owed from one branch of the Federal government.
it is important to keep this straight even if the bookkeeping is a little crooked.
I love these “Best of Angry Bear” postings. Note that the national debt includes more than debt owed to the public. The latter metric is better for identifying irresponsible economic policies. The former is better for identifying irresponsible fiscal/budgetary policies (national debt includes debt that will become debt to the public in later years).
It would be interesting to see updated figures.
I would like to know which party was the majority in Congress during these years, as they determine spending and tax policy.
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As this article in Angry Bear states:
“To summarize – among Presidents from 1929 to the present, Democrats produced faster economic growth than Republicans with quite a margin to spare. Additionally, both Democrats and Republicans in the Oval Office were more likely to produce faster economic growth the greater the percentage of years in their term that the Democrats controlled Congress.”
Jeb Bush talks about his foreign bride
On Tuesday presidential candidate Jeb Bush spoke about the first meeting between himself and his future foreign bride, Columba. ” It was love at first sight. I spoke little Spanish and she spoke little English, but when you are in love you can overcome those barriers pretty quick. There’s another language that matters the most.”
John Ellis “Jeb” Bush is an American businessman and politician who served as the 43rd Governor of Florida from 1999 to 2007. He is the second son of former President George H. W. Bush and former First Lady Barbara Bush, and the younger brother of former President George W. Bush.
Bush met his wife while in Leon, Mexico helping to build homes. León is a city in the Mexican state of Guanajuato. They married a few years later in Austin, Texas, and now live in Coral Gables, Florida.
Is there a difference between Jeb Bush’s Foreign Bride and so called Mail Order Brides? Feminists and women rights groups have argued for years that men who travel across boarders for love take advantage of women that come from lower economic regions. In 2005 the Tahirih Justice Center and Senator Cantwell pushed legislation regulating foreign brides, stating that men take unfair advantage of women in foreign counties. The law (IMBRA ) requires marriage brokers to run background checks on all men that seek a foreign bride. Bush’s wife was underage at the time they met and came from one of the poorest areas of central America. Did Jeb Bush then take advantage of his future wife Columba? After all she came from poverty and Jeb Bush came from a powerful, wealthy family.
Kenneth Agee, Marketing Director of A Foreign Affair, a company that specializes in foreign bride match-making says, “Absolutely not! In our society and most societies women are always looking to find a better way of life. It is instinctual for females to find the best possible suitor for having a family, just like it is instinctual for men to be attracted to certain physical aspects of women. How would marrying into wealth make you a victim? The notion that men have economic control of women, at best, would not last long after marriage. It is equally invalid to say women have a control over men because of their beauty. The truth is, a negative situation can happen no matter where you meet and has more to do with character than economics or location. Personally, my wife is from Russia, is very strong-willed, and would never let herself become a victim. I find this to be true of most foreign women. I’m sure Jeb Bush would agree. Contrary to the opinion of Terra Justice Center, an INS study showed there were fewer issues with cross-border marriages than domestic marriages. In fact they have a much higher success rate”
And Jeb Bush is not the only candidate with a foreign-born wife. Candidate Donald Trump is also currently married to Melania Trump, a former model from Slovenia. Donald Trump’s first wife, Ivana, is from the Czech Republic.
Marrying foreign women is becoming a trend for the elite. FOX News CEO Rupert Murdoch is married to Wendi Deng Murdoch from Jinan, China, with a 38 year age difference.
Yet feminists continue to argue that men seek foreign brides only because they lack the necessary social skills to find someone in the US. This is clearly not the case, as these successful men do not lack socials skills.
Society has changed greatly over the years and love has no borders. Looking worldwide for love is becoming the norm now. Each week companies like A Foreign Affair take dozens of men to countries all over the world where they attend social events, meeting hundreds of beautiful women and models, who like themselves are serious about finding true love and marriage. These men are from many varied walks of life: doctors, CEOs, policemen, businessmen, you name it. You don’t have to be a Bush or Trump to see the advantage of looking abroad for real love.
With two candidates, Jed Bush and Donald Trump, both married to foreign brides, we could see our first foreign-born First Lady in the White House.