Federal Deficit by President
If you look at the federal deficit as a share of GDP by presidential administration an interesting pattern emerges.
Every Republican administration left office with a larger deficit than they inherited.
Every Democratic administration left office with a smaller deficit than they inherited.
Why should we pay any attention to anything any Republican says about the deficit.
I think you meant “…anything any Republican says about *reducing* the deficit…”
Congress writes the spending bills. All a president can do is sign them or veto them.
I, for one, certainly blame Bush for not vetoing the 2008 and 2009 spending programs of the Democrat-run congress, which increased the deficit eight-fold in only two years.
It seems the winning combination is a Republican-run Congress with a Democrat for president.
It wasn’t profligate spending by the Democrats that caused the 2008 and 2009 budget deficits to balloon. It was putting the deficit spending for the wars, the Medicare Drug benefit, the costs of the recovery from 9/11 which occurred under Bush II’s inattention and a couple of other programs that the Republicans had decided shouldn’t count toward the deficit back into where they counted toward the deficit.
And and the budget deficit contribution that came from the revenue decrease and added spending due to the Great Financial Crisis and Recession caused by the conservative deregulation and failure to regulate delusions.
You forgot the 2001/2003 tax breaks.
If the deficits had not been going DOWN between 2003 and 2007, I might believe you.
If you want this to be an example of analysis rather than an example of debating tactics, I think you need not to use unified budget and you need to make some kind of adjustment for bubble generated revenue.
I just love people who talk about deficits while paying no attention to revenue at all, let alone trying to figure out the circumstances and policies that led to that revenue.
What unproductive discussions this post induced! It immediately implies that austerity is the way, causing liberals to be exclaim “blame Bush for the deficit!” (partly true) and conservatives to shout back “blame Obama for the deficit!” (also partly true). But why should we blame anyone for simply running larger deficits? If one is faced with a depression, then a ballooning deficit is very sensible. Alternatively, if one is faced with a period of growth, a growing deficit is less sensible. Its simply sensible countercyclical policy (though taking into account MMT, one could even argue that always running deficits is fine too). Either way, outlets on the Left, like Angry Bear, should never succumb to the notion that deficits are bad on their face, because the Left will never win if we allow for that foolishness.
I don’t know about before Clinton, but both Clinton and Bush had bubbles during their terms,and bubbles lead to significantly higher revenue. You can see the difference in IRS data for capital gains income.
Also, much as Bush really sucked, he had the ends of both booms in his time and you can’t say that is because of any policies he championed.
Harold, I would agree with you except the right is constantly blaming the liberals for the large deficits when it is the right that has a deliberate policy of starve the beast to create large deficit. From the right-wing perspective the deficits are a desired feature.
That is the basic reason I did the chart, to counter the right-wing argument that liberals are the cause of the deficit.
The liberals do make two quite different argument about the Bush deficits.
One, the large Bush deficits made it impossible to implement a large enough stimulus program in the great recession and is a major reason the recovery has been so weak.
Second, given the large deficits that social security and more importantly Medicare face in the no so far out years it would be a good idea to build up a war-chest of surpluses to deal with those problems when they arrive. But the large Republican tax cuts precludes that and assures major problems down the road.
I do not think either point is covered by your comments.
Arne, yes Clinton had a boom.
But what boom did Bush have. For example under Bush the change in the S&P 500 was:
That’s the major source of capital gains.
Arne, you sure about your capital gains data.
From 2000 to 2004 taxes paid on capital gains fell from $111,567 M to
$44,903 M or over half.
You have to ignore patterns like these if you believe what they tell you about the political parties. It always just happens …
“But what boom did Bush have”
google “historical capital gains as a percentage of income”
(I think) real estate provides significant capital gains revenue.
Yep, I guess you could be correct. Even capital gains acquired through fraud and manipulation would be a capital gains boom.
Capital gains do not grow an economy, they are the result of growth.
Beware of any Bernie as in Madoff or Sanders who wants or believes that everything can be “free”. Yes it sounds good and sells to many people but there is no reality to this thinking…Back to booms we had the Vietnam war that cost say $1T and the Iraq war that cost $2T. The housing collapse that cost $1T and the Wall St. bail outs that cost $1T. The only boom I saw was in the fraud and manipulation of Wall St. and big government waste. I saw a huge boom in manufacturing jobs leaving the country. I saw a boom of lost living wage jobs leaving the country and in the cost of living. I saw a boom in wealth inequality and taxes I paid. I saw a disproportional boom in crime prosecuted against the middle class, poor and minorities. I saw a boom in all taxes from all levels of government. I saw a boom in labors low wage rates stagnation and lower labor participation rates. I saw a boom in greed and wealth hoarding by the oligarchs and in Frankenstein capitalism…This is the America we have all come to love like in the Wal-Mart model. Where else can you buy guns, beer and beef jerky all in one place. This is like heaven on earth. Good thing Wal-Mart came along when it did, cause last year thirty businesses went out of business on main street. Damn economy! This is all Obama’s fault! Ooh look! turkey jerky!… Don’t become oblivious to greed as the pillars of democracy have become eroded. “The true strength of our nation comes not from our arms or wealth but from our ideals”. B. Obama. What we all collectively believe as a nation be true. We must define ourselves by our actions, not our circumstances. Encourage others to embrace change and to grow from our experiences as it comes. IMHO.
“Also, much as Bush really sucked, he had the ends of both booms in his time and you can’t say that is because of any policies he championed.”
I beg your pardon, but Bush policies, at the very least, multiplied the effects of the housing bubble.
When he had the OCC stop states from regulating national banks, that was a huge factor. When he ignored considerable FBI evidence of widespread mortgage fraud, that was a huge factor. When he ignored thousands of legitimate appraisers who warned him about banks buying values, that was a huge factor.
And the worst part? None of this had to go through Congress. It was all on hum and his administration.
Yes, Warren, as such one could use capital gains as a proxy measurement for growth, except that IMNSHO capital gains are so causally related to bubble growth that they become a poor measure of useful growth. Since capital gains do impact revenue, which does impact deficits, there is also a problem with using deficits as a proxy for anything useful – unless you have a meaningful way to correct for bubbles.
I don’t pretend to have an answer, just a question.
I was only observing that you cannot make a case for Bush being responsible for _both_ of the recessions on his watch.
First, I agree. Minor as it was.
Key player in the second.
So, you don’t like a graph of federal deficit vs president? How about you show us plots of federal deficit vs who was in control the the House and the Senate instead of just bitching and making unsubstantiated claims.
Jerry, Don’t like the facts. Sorry about that. Maybe if the truth hurts you should look hard at your beliefs.
Tell me, what unsubstantiated claims did I make?
Arne — the table of capital gains you linked to is exactly the data I was using in my comment that capital gains peaked in 2000 and fell by over 50% by 2004.
Look again at your second table, capital gains taxes peaked in 2000 at exactly where I said they did and have only surpassed the 2000 peak in one year, 2007, before collapsing again.
I do not understand you Arne. You reject the data I used and refer me to a table that has exactly the same data I used to refute my post. Do you really have any idea what your are doing?
By the way, Arne the tables you referenced do not have capital gains taxes as a % of income as you stated.
Rather it has capital gains taxes as a % of GDP.
Can not even read your own table,can you?
Ronald Reagan was the first big spender, and Bush I was slightly better. When Bill Clinton became President, he looked at the deficit spending pattern under Reagan and Bush and became concerned. The 1993 tax bill, passed with not one Republican vote, put us back on track, so that by the time Bill and Hillary Clinton left office there was a projected $5.6 trillion surplus projected over the next ten years. This rosy picture, which would have just about retired the national debt, was immediately destroyed by George W. Bush. He gave us two silly tax cuts, two misguided wars, and a Medicare prescription drug coverage plan with no revenue source.
Obama should take no blame for any of the Bush deficits. Obama inherited an economy in shambles, with much lower tax revenues and much higher governmental costs. He also inherited two wars, which will wind up costing over $2 trillion.
I personally think the the Democrats should have gone along with the balanced budget amendment in the late 1990’s. Republicans don’t care about deficits, they just want no taxes. A balanced budget would have forced Bush to pay for his wars.
I found that to get IRS data, I would have to go through it year by year. I did that once, but it was the better part of a decade ago. I thought the increase from 2002 to 2007 along with my understanding of what happened to real estate prices was enough to warrant my observation without nailing down the specifics – it is your post, not mine – you can do with it what you will.
I am pretty sure that Bush was worse than the data suggest, but Clinton was not as good as.
I think this may have all the data you were looking for:
“Obama should take no blame for any of the Bush deficits.”
Obama voted for the last two, which increased the deficit eight-fold in two years.
My comment was directed at your commenters. You presented data and made statements based on that data. I like your graph.
Sometimes it helps if you put a name in your return. No mistakes then Jerry! I thought it was odd of you also.
Warren, thanks, but it the same as the data already linke.
Spencer, sorry, now I see what you are saying. I just included the text I googled to find the data without paying much attention to the fact that the data did not match the search very well. The data show the two peaks at 2000 and 2007 with what I see as a pretty clearly lower trendline before, between, and after. Imagine what Bush revenue would have been without the housing bubble.
With all due respect: This graph does not represent what the author is talking about. It does not list the deficit as % of GNP as that has to be a positive number unless there is no deficit or an actual running surplus. In either case, it would appear just from the plot of the graph that the deficit actually went up from the beginning to the end of the terms for both Clinton and Obama and actually dropped for Bush. Perhaps the author meant to state the change in deficit, not actual deficit or perhaps the deficit for one particular year’s budget, not the actual total running deficit. When using graphs and statistics one needs to be both accurate and specific less the narrative becomes nonsensical.
This is dated, but a quick search got this post by Mike Kimel
Mike’s book looks at most of the objections mentioned plus many more…the idea was vetted over 3/4 years of posts.
I was trying to find some of Mike’s posts also.
William, it is standard practice to show the deficit as a negative number.
But, OK, let us try your idea of showing it as a positive number. But when you are doing it your way how do you show the relationship when the budget is in surplus as compared to a deficit?
Never mind. Seeing the “budget deal” did nothing to stem the inky red tide, but instead opened the floodgates, I withdraw my comment about a Democrat President and a Republican Congress.
These guys are disgusting.