The Journal published one of those jaw-dropping charts about the U.S. national debt last Thursday, and it looked pretty bad:
There are two things to argue about here: One is the economic debate about how dangerous this “debt mountain” really is, and whether deficit-cutting today amid high unemployment would just stall the economic recovery (the famous “mistake of 1936”).
The other is the political debate. We’re in the middle of an election cycle, so charts like this fuel voter anger and “throw the bums out” sentiment.
I’m a timeline-oriented sort of person, and so the first thing I did when I looked at this chart was ask, “OK, let’s plot the presidential administrations by party along the horizontal axis and see what we find.” Since what I found was pretty remarkable, I marked up the chart below. Blue bars are Democratic administrations.
Pretty much speaks for itself, no? The main observation is that the huge runups in the debt that we’ve experienced since 1980 are almost entirely the results of the policies of two Republican presidents, Reagan and Bush Jr. (The elder Bush deserves some credit for a willingness to tackle the debt through a modest tax increase.) Yes, these presidents sometimes had the cooperation of some Democrats in Congress. But the disastrous supply-side-style tax cut policies were authored by these presidents’ administrations, and they are responsible for them.
The truth of the last three decades of American economic history is simple: The GOP has repeatedly pursued a policy of “cut taxes and let our kids pay for it.” Some supported it out of a mistaken belief that tax cuts would always pay for themselves in economic growth. Others supported it out of a Machiavellian belief (“drag it into the bathroom and drown it in the bathtub”) that if you cut taxes enough, you could force the government to scuttle popular government programs that Republicans detest like Medicare and Social Security. Others supported it out of plain old self-interest (tax cuts are always popular).
Whatever their motivations, every Republican politician who rails against the evils of the debt should be shown this chart and asked to explain it.
CORRECTION/UPDATE: As William Sullivan points out in comments, this chart, which I mistook for a graph of public debt only, actually aggregates public and private debt. I’ll poke around for a public-debt-only graph. In the meantime, it’s interesting to think, gee, what does it mean that both public and private debt together surge under our most recent Republican administrations? The positive spin, I suppose, would be: Business is humming and consumers are confident during these expansive GOP eras so people take on more debt.
Given what we experienced in 2008, however, I think a more accurate read would be: Our supposedly conservative Republican presidents actually presided over massively risky leveraging of our economy without thinking about how either the government or private citizens would actually pay it all off. Which, to me — speaking as a liberal who has paid off his credit card bill every month of my adult life — sounds like the opposite of “conservative.”
- July 19, 2010 @ 19:17:56 [Current Revision] by Scott Rosenberg
- July 19, 2010 @ 12:37:40 by Scott Rosenberg
- July 19, 2010 @ 12:34:37 by Scott Rosenberg
- July 19, 2010 @ 12:34:22 by Scott Rosenberg
Nice work. I heartily endorse taking the long term or historical perspective. It’s weird that republicans are able to maintain the idea that they are the party of fiscal responsibility. Would you try coloring this by which party was in control of congress at the time?
It seems to me that this chart is measuring total US debt, both public and private. It’s hard to tell, but the title and note at the bottom of the chart make it seem to be measures of all lending, not just to governments.
William, I think you’re right. I’m going to add an update to the post correcting that…
This is an interesting observation. But the administrative branch doesn’t create the actual budget, it only submits a budget proposal. The congress then creates the actual budget resolution, and then passes various appropriations bills that need to be signed or vetoed by the president. We should probably also create similar chart indicating which party had control of congress, although for some years we might need some kind of striped background to indicate that control was split (one party controlling the house and another the senate). Just saying its not quite as straight-forward as a simple chart might make it seem.
Yes, Congress certainly bears responsibility, and constitutionally it is the originator of budget bills. But in practical terms, I think there’s no question that Reagan and Stockman (in 1980-1982) and Bush and his team (in 2000-2004) proposed the tax cuts and engineered their passage. Just as Obama bears responsibility for health care reform, even though Congress made the sausage.
Does this site give you the Federal Debt data you ask for? http://en.wikipedia.org/wiki/National_debt_by_U.S._presidential_terms
Also, this graph shows a ratio. The debt numbers, at least the Federal Debt, are reasonably easy to document (the numerator). You didn’t mention much about the denominator, GDP, in your post. If I’m remembering right, GDP has been calculated in varying ways over the years, with some kind of standard being set in 1993.
I would think that GDP is a lagging measure. President Obama inherited a difficult economy, which has contracted and might be continuing to do so. And debt incurred in the past might require more debt to service it (as every credit-card borrower knows). It’s possible that a President might be tarnished by inevitability of both debt and economic decline. So how can we tell the impact of good executive management? I propose that it’s not the level of this ratio that matters so much as the change in level. Administrations with falling debt/GDP ratios show economic growth under whatever debt burden they are stuck with. A rising ratio might show economic decline relative to borrowing.
Though this is a slightly different way of looking at your graph, I don’t think the conclusions are much different. Looking OK (at least by this reasoning): Kennedy/Johnson, Nixon, Carter. Looking not so great: Clinton, Eisenhower. Looking great: FDR. Looking abysmal: Hoover, Reagan, Bush Jr.
Just revise your graph to show who was in poer of the purse strings. And then spout your findings.