PUBLIC SERVICE WARNING: Deficit Attention Disorder

Posted: February 19, 2013 in Fox "news", Obama, politics, Republicans
Tags: , , ,
Who you gonna trust?

a deficit cartoon Mike Thompson 1-6-13

Who is better for the economy – the Dems or the GOP?

The common viewpoint is that Republicans are good for business, which is good for the economy.  Republican policies – and the more Adam-Smith-invisible-hand-limited-regulation-lassaiz-faire the better – are expected to create a robust, healthy, growing economy.  Meanwhile, the common view of Democrat policies is that they too heavily favor regulation and higher taxes which are economy killers.

Right?

Well, for those who feel this way it may be time to review the last 80 years of economic history.   Bob Deitrick and Lew Godlfarb have done it in a great, easy-to-read book “Bulls, Bears and the Ballot Box” (available at Amazon.com).  Their heavily researched and footnoted text reveals some serious inconsistency between the common viewpoint of America’s dominant parties and the reality of how America has performed since the start of the Great Depression.

The results of their research:  Our country has never done better economically than under Roosevelt, then again under JFK, then under Clinton.  The Democrats have this economy thing nailed.  (Personally, I’m having trouble understanding WHY the Republicans are even being listened to when it comes to economic policies.)

Here are some facts:  (check out the book for sources, footnotes, etc.)

  • Disposable income has grown nearly 6 times more under Democratic presidents
  • Gross Domestic Product (GDP) has grown 7 times more under Democratic presidents
  • Corporate profits have grown over 16% more per year under Democratic presidents (they actually declined under Republicans by an average of 4.53%/year)
  • Average annual compound return on the stock market has been 18 times greater under Democratic presidents (If you invested $100k for 40 years of Republican administrations you had $126k at the end, if you invested $100k for 40 years of Democrat administrations you had $3.9M at the end)
  • The two times the economy steered into the ditch (Great Depression and Great Recession) were during Republican, laissez faire administrations
  • Republican presidents added 2.5 times more to the national debt than Democratic presidents.  More on this one:
The National Debt (I know it's a really boring topic...please read anyway.)

Under Clinton we ended up with NO deficit.  In fact, we entered into a state of surplus!   But then Bush was elected.  And elected again.  Where did our surplus go?

debtHere’s a fact (all of this information is from the Congressional Budget Office):  The Bush tax cuts and the wars in Iraq and Afghanistan will account for almost half of the $20 trillion in debt that, under current policies, the nation will owe by 2019.  The stimulus law and financial rescues will account for less than 10 percent of the debt at that time.

According to the CBO, the Bush tax cuts are the single largest policy contributor to the current deficit.   (Need more background on this claim?  Click HERE and HERE and HERE.) 

Every analysis you read or listen to (unless you’re listening to FOX news) tells the same story:  The primary drivers of the debt predate Barack Obama.  The post-9/11 wars and security build-up, the Bush tax cuts, and the 2001 and 2008 recessions began before Obama became president. You can blame him for extending the Bush tax cuts till 2012, or for the stimulus (though the stimulus would never have happened without the 2008 financial crisis), but the structural deterioration came in the Bush years.

Sure, it’s true –  Since President Obama became chief executive, the national debt has risen almost $5 trillion.  But how much of that was because of policies passed by Obama, and how much was caused by the financial crisis, the continuation of past policies and other effects?  The Center on Budget and Policy Priorities did an analysis.  Their conclusion:

George W. Bush’s policies increased the debt by more than $5 trillion during his presidency. Obama has increased the debt by less than $1 trillion.  Read related article.

Here’s the bottom line:  Our country has never done better economically than under Roosevelt, then again under JFK, then under Clinton.  The Democrats have this economy thing nailed.  Don’t for a moment buy into the crap about Obama’s free-spending, reckless, America-killing ways.  It’s the Democrats that have consistently brought us prosperity.

Yes, our country is still suffering (although in recovery) from years of bad economic policies.  But guess what?  Cuts in spending have never brought our country out of financial crisis. Just look at what the austerity measures have done to the European countries. The Republican “solutions” are dangerous.

Of course, the 40% of the country that gets its information from Faux News will never hear these sorts of truths and will continue to trust the people who have consistently screwed our economy.  If you know any of these people, please, for the love of Pete, attempt to educate them.  There is too much at stake for us to hand the reins back to the GOP in the 2016 presidential election.

increases-in-national-debt

(For more, check out Bob Deitrick and Lew Godlfarb’s great, easy to read book “Bulls, Bears and the Ballot Box”)

Comments
  1. OK, this one sails so far into fantasy land that I hesitate to even respond….

  2. nash says:

    Oops – none of my links made the final publication – I’m not sure why. I’m on the road now, but will add the sources/references back in tonight.

  3. Steve Morris says:

    These statistics and colourful graphs are essentially meaningless because readers of this blog have no way of knowing where they come from or what they mean. If you want to make enormously far-reaching and counter-intuitive claims like this you have to take your readers step by step through the evidence/arguments.

    Nash, Your blog used to be very interesting when you were asking questions and seeking answers. Now that you seem to know all the answers it is in danger of degenerating into a political and religious rant. Hoping that you can turn that around 🙂

    • nash says:

      Good reminder – I’ve been more explicit in my sources this time around – check it out. So—which parts do you disagree with, and why?

      • Steve Morris says:

        Nash, you just refer to a book that I haven’t read that claims the Democrats outperform the Republicans in every area of the economy. There isn’t a single fact here that I can agree or disagree with, because there isn’t a single fact. Just some opinions pretending to be facts.

        • nash says:

          Steve – I think you’ve inadvertently confused “opinion” with “facts you don’t like.” I’ve linked to the Center for Budget and Policy Priorities website, the Pew Fiscal Analysis Initiative, and other articles, all of which are saying what I’m saying. I’ve also referenced a heavily footnoted and researched book – the actual basis for this article. This book is loaded with facts (the same ones I’m highlighting here). Which specific claims in my article do you disagree with, and why? Even choose just one!

          • Steve Morris says:

            Nash, I’m not American, so I’m not going to get into a discussion of US GDP and national debt. But my reaction to your collection of “facts” is “so what?” If you want to convince people of something, you need to come up with simple reasons why it’s true, not a bunch of stats. I’ll be addressing the same issue on my blog next month, so maybe you could comment there?

            • nash says:

              Hey Steve – yes, I’ll check it out…give me a heads up when you post, will you? I’m not sure what you mean by needing a simple reason why it’s true…what are you getting at? The point of my article is that the GOP is NOT the party that handles the economy best, contrary to conventional wisdom. So, therefore, we should be cautious about electing them. Is that not clear in my article?

              • Steve Morris says:

                Reasons … hmm. Our lives are made up of narratives. We tell ourselves stories to explain the world. You have a narrative in your head that says Democrats are better than Republicans because … This article is about finding facts to hang on that narrative.

                I have no suitable narrative to hang those facts on. They make no sense to me. You need to give me a narrative. You have to give me clear explanations of why raising taxes and spending more public money is a wealth creating process. You have to explain to me why free markets kill the economy.

                In my blog, I’m going to be asking questions like, what is this left/right political divide, what each side thinks, why each side is right and wrong, and what the way forward might be. I won’t be getting into party politics. I’m hoping you might be able to contribute to that debate 🙂

                • nash says:

                  Hey Steve – I think I understand now. This is about the difference between being non-partisan and “taking a side.”
                  First, though, I have to say that I find your statement that I’m finding facts to hang on my narrative offensive and kind of disrespectful. (I work with clients all day, and I hear this a lot – “I know what’s in your head, here let me tell you about it” – and it always comes across as arrogant.) First of all, I have always believed the conventional wisdom that the GOP is better for the economy. I don’t anymore, and that’s because of research. Secondly, I didn’t say that “free markets kill the economy.” That’s a ridiculous statement, actually, and it’s a poor way to argue with someone – make up a crazy position and attribute it to the person you’re debating, then point out how crazy it is. (I think that’s called a straw man, right?)
                  But back to non-partisanship: I am definitely not that! 🙂
                  And my blog doesn’t pretend to be that. I think there are serious problems in our country, and for the most part I believe that a left-leaning, liberal approach is the right answer. In fact, I think the GOP, in general, is rather dangerous for our country – they get more people killed, they cost us more money, they put is more debt, they create more poverty and general misery. I know that sounds dramatic, but I think the facts support that. And that is (in part) what I write about. I’m not willing to use up valuable blog time and space presenting some santized, politically correct, clinical “both sides are equally valid” garbage, because I don’t believe it’s true OR helpful. (And I find those sorts of blogs kind of boring, too.) SO – we have different approaches…which is GOOD!

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