Spent some time on Wikipedia and elsewhere today.
Why? Listened to the State of the Union last night (it’s all the Republicans’ fault) and then listened to talk radio responses (mostly: Obama is an evil socialist who just might have really been born in Sweden, not Hawaii).
Wanted to find out for myself what’s really going on with the debt/deficit/spending thing.
Got surprised by a lot of things. The right/left divide has created an ideology-bound way of bending the truth about debt/deficit. Both left and right just see what they want to see. And they love to blame each other.
Facts suffer under this ideological pressure to prove one’s side as “correct.”
For instance:
Q: When (in the last 75 years) was the cumulative (real % of GNP) national debt the lowest?
A: During the Carter years. Lower than the 40’s, 50’s, 60’s, 80’s, 90’s or whatever we decide to call the last decade.
Q: When was federal spending the highest?
A: FDR’s reign. Nowhere in our history even comes close in federal spending as % of GNP. The Great Depression and WW2. Since then, it’s been less clear which side of the aisle is the biggest spender.
Also, the national deficit and the national debt are not the same thing.
For some of you this is 101, but apparently not for most Americans, a majority of whom are unable to distinguish correctly between the two.
The deficit is the annual gap between government income and spending; the “hole” in the annual budget, if you will.
The debt is the cumuilative total amount we owe (to whom is pretty unclear, no matter how much you look into it); the result of lots of deficits in a row.
I am a pro-family, free market, fiscal conservative (not that this matters, just want to be clear that there is no “liberal” agenda here) and was surprised to find out that the following presidents increased the total national debt, during their total time in office, by these percentage amounts:
Jimmy Carter: 45%
Ronald Reagan: 189%
Bush the Elder: 55%
Bill Clinton: 36%
Bush the Younger: 89% (not so bad over 8 years, considering the challenges he faced)
Obama: We don’t know yet, the first years for all of the above presidents were not indicative of the patterns to come for their terms.
Of course, Reagan, Clinton and “W” were 8-year presidents. The others were 4-year guys. Factor that in. Also, inflation is always a rich field for misinformation. It often gets left out or mentioned specifically in order to skew info. 1960 dollars are not the same as 2010 dollars, so sometimes “record” deficits are not really records. No president, in real GNP %, has spent as much as we did in WW2.
Same is true for population changes. America has about 300 million people (we’ll see how the 2010 nose count goes) which is almost twice as many as when I was born. Comparing the debt of a nation of 300 million to the debt of a nation with 150 million is apples vs. oranges.
It seems that, in real un-spun facts (which no one would dispute), the presidents who have most increased the National Debt of the US, in my lifetime, have been primarily–Republicans.
So how do the Democrats get the ‘tax and spend’ rep?
No matter how you cut it, no matter whose numbers you use, Bill Clinton was the most frugal of the presidents in our lifetime–and the prosperity during that era, in my opinion, may have resulted from that (my libertarian tendencies are showing). Not that I approve of him, his policies, or his views. But I like his deficit numbers. Who doesn’t?
The last recorded annual surplus (the opposite of an annual deficit) was during Clinton’s term. A Democrat.
My only explanation is that Republicans somehow don’t count defense spending as “real.”
In all fairness, Republicans aren’t ‘tax and spend,’ they just spend (and cut taxes). This opens up huge deficits.
Bush the Elder had the courage to call this “voodoo economics,” and he was right. He took it back so he could be Ronny’s VP, but it was true then and it’s true now.
Now granted, thank God that Ronald Reagan spent so much on defense–he bankrupted the Soviet Union without firing a shot; history will remember him for that. But he raised the stakes with money he didn’t have.
Glad he did it? Yes.
But it was real spending.
Granted, the social programs that the Democrats prefer are usually more or less useless in terms of real results (good intentions–lousy outcomes). But they cost way less than aircraft carriers.
And those who want to paint Democrats as socialists, ironically LOVE socialized military (obviously the most expensive form of socialism around). But somehow that doesn’t count.
Please hear me, I also, along with the Republicans, prefer a well-funded socialized military. A private military (pay the Hessians to protect us) would be a mess. And the corruption would be unbelievable. Interesting that no Republican would deny our men and women in uniform the right to socialized medicine…which they all have.
We fought a war (WW2) on two continents and destroyed massively evil regimes (Nazis, Fascists, etc.) in four years with socialized military. I am also very proud of our men and women today in the military–they are amazing.
Not that I have totally formulated how I feel about all this, but it’s important for social and market conservatives like myself to look at real numbers. We tend to want to idealize Republicans and demonize Democrats. Overspending is apparently an equal-opportunity employer!
The truth is important. In my adult lifetime, the big spenders have been the Republicans. The only difference is, they cut taxes at the same time–which piles up debt.
Military spending counts as real spending. And there is a real cost to being a warrior nation with extensive, long term, expensive deployment (Korea, Vietnam, Iraq, Afghanistan) in a hemisphere (Eastern) where our country isn’t (Western). Last I checked, with all of our valiant efforts, those four countries (where we have spent so much money and spilled so much blood) are still nut cases. Half of Korea is arguably the strangest place on planet earth.
If we are going to make real progress against big government, we have to look at real numbers. Including military spending.
How much of the world are we going to protect and how many failed states are we going to rescue from crazy dictators? Can we afford to straighten out the whole world? Where does it end?
Seems simpler to me. Agree on what % of our GNP we want to spend on the public sector (including military). Make real laws (Constitutional Amendment) against spending more that that. And then prioritizing, through democracy, how that fixed amount gets spent. Decide on how much of the globe we are going to police and stick to that. Let the Europeans worry about Kosovo, etc.
Living within our means.
My libertarian side says that our economy would flourish. And our military would focus on defending (which they do well) our homeland.
Just ideas. But since they’re my ideas, I think they’re right.
Unless you have better ones, which may well be true. Let me hear from you.
David Housholder Essays 
24 comments
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January 29, 2010 at 5:28 am
Randy Wawrzyniak-Fry
Two cautions.
1. You attribute debt to presidents. Read the constitution. Only the congress can spend money and thus create debt. The Democrats controlled congress during much of Reagan’s presidency, the Republicans (most importantly Newt Gingrich) controlled congress during the Clinton years. BTW the chart you list was put out by the Democrats who apparently also need to read the constitution.
2. Wikipedia is not a reliable source of information. I’m not saying that the data you listed is incorrect just that Wikipedia is often wrong.
January 29, 2010 at 5:42 am
David Housholder
Still, you and I both know that the executive branch writes the budget.
Congress didn’t demand that Ronnie spend bazillions on military. He really wanted to.
Just trying to point out that the cliches about the “other party” (whichever one is pointed at) spending too much usually really means “spending too much on the things I don’t like” while both sides turn a blind eye to spending that they DO like as “essential.”
And the Democrats probably do tax more. But NOT taxing when you spend a ton is equally unbalanced (Republicans). It creates deficits which lead to debt. You can’t cut taxes, increase military spending, and then expect to balance the budget.
You and I also both know that Newt’s contract didn’t last long, and that Reagan had the support of Southern and conservative Democrats (who are mostly now Republicans). He was able, like Roosevelt, to forge a grand coalition. I actually was a Reagan Democrat. I know how that goes.
January 29, 2010 at 6:20 pm
David in NOLA
I see that David H. dropped the false naivete posture as soon as Randy chimed in to deny facts he finds inconvenient. But, honestly, both of you seem like such committed ideologues that you are missing opportunities to solve real problems. “Big government,” for instance, is just not a real issue (big compared to what? big in what way?). Similarly, deciding how much of GNP we want to spend, abstractly, before defining any problems we want to address, is just abstract ideological posturing. Find a problem. Figure out the best way to solve it (government, in some cases, for example). Figure out if we can afford it. Any other approach is just hot air…or just backwards.
And every side engages in this kind of hot air…or peacock strutting. I know that Randy and many other of David H.’s readers can’t stand the New York Times and Paul Krugman, but you really ought to read his latest column: http://www.nytimes.com/2010/01/29/opinion/29krugman.html?em. I think this is a pretty solid assessment of the situation, regarding deficits, unemployment, health care, etc. Maybe this can get you focused on something other than abstract worries about “big government” and being “pro-family” (which I still think is a pretty funny phrase).
January 29, 2010 at 7:57 pm
Randy Wawrzyniak-Fry
Let’s see “false naivete posture”, “ommitted ideologues”, “abstract ideological posturing”, “peacock strutting”, “just hot air…or just backwards”. I’m sure since you have approached this with such an open mind that you will be as equally open to my thoughts on Mr. Krugman’s article.
“The only thing that’s keeping us from sliding into a second Great Depression is deficit spending.” – I disagree that it is government and government alone that is protecting our economy. There is no evidence to suggest this. If we take President Obama’s word for it the stimulus has created 2 million jobs. Two million more unemployed, while certainly a problem (especially to the 2 million) would not drive our country into a second Great Depression.
“the government should be doing everything it can to bring unemployment down” I agree, however I do not agree that “everything it can” should be out of control spending. I believe that the stimulus money would have been much better spent as tax breaks to individuals and companies that create jobs.
“the long-run budget outlook was dire even before the recent surge in the deficit, mainly because of inexorably rising health care costs” Where are the facts to support this?
“it’s now clear that the Obama stimulus wasn’t nearly big enough” Not big enough? As I said above, I believe that it wasn’t the size of the stimulus, but rather how and where that money was spent. Second, only about 1/3 of the stimulus has been spent, the remainder being saved to influence votes prior to the November elections.
“Republicans were very successful at demonizing the plan” So if you have a plan and I point out its flaws I’m demonizing it? Interesting.
“blame the filibuster, under which 41 senators can make the country ungovernable, if they choose” So the fault is that the constitution is flawed. Once again, interesting.
What this comes down to is how we view human nature. I believe that individuals, acting in their own informed self interest (and I admit many lack the “informed” part), within the free market will create the best for the greatest number of people, and will create wealth. Others believe that human nature is such that without constant control by an authoritative government, a small number of individuals will collect all of the wealth at the expense of the masses.
January 29, 2010 at 7:13 pm
George Macaulay
Dave,
Nice post. Just a couple of thoughts. First, Reagan and Younger Bush cut tax rates. Tax revenues actually rose, so the tax rate cuts didn’t cause the deficit increased spending did. Second, under Bush, the percentage of taxes paid by the wealthiest increased, so the tax system became more fair (if you like progressive taxation) or less fair (if you prefer a flat tax). Third, Clinton was dragged kicking and screaming toward a budget surplus. His budgets showed deficits extending through both terms. The republicans in congress were responsible for that one. The clearly screwed up when Bush became pres and they decided to go on a spending binge. Bottom line, it’s the spending on everything, and not the taxes.
As for the Krugman article, he’s just gone off the deep end. Absolutely silly arguments.
January 30, 2010 at 1:20 am
David Housholder
How about Stockman, more conservative than Reagan (which was why he got fired)? He has severe misgivings about how Reagan implemented the Laffer curve>>http://en.wikipedia.org/wiki/Laffer_curve
January 30, 2010 at 2:37 am
Daniel Pettit
Hous I’m not getting why you think Stockman is some smoking gun. What difference does it matter if the Reagan years didn’t follow Laffer’s theory to the T? Don’t tell me you’re one of those Roaring 80’s deniers, that if only we’d been as “fiscally prudent” as Carter everything would be fine today.
Carter starved the military. Not only did Reagan have to “build” up the military to crush the USSR he had to make up for the neglect of the Carter years. Do you really think Tip O’neal would have cut the size of the government?
January 29, 2010 at 11:33 pm
David in NOLA
Actually, Randy, it seems that many mainstream economists believe that the stimulus package and deficit spending have played a key role in reviving growth in our economy. Check out this report, http://www.epi.org/publications/entry/ib265/, for example. Here’s an explanation of how deficits can help spur growth: http://epi.3cdn.net/1616707e0c784d8134_4nm6becsb.pdf. Also, the crazy leftist rag known as the Wall Street Journal surveyed economists, who agree that without the stimulus package, the unemployment rate would be higher, growth slower, etc. (http://online.wsj.com/public/page/economic-forecasting.html). So, to say that there is no evidence for Krugman’s points is just wrong.
As for an open mind, well, I am not sure what you are looking for, but I am looking for a recovery and growth. I think there are many things we can (and have been) doing from a policy perspective. Our views on human nature are really not relevant (but as an anthropologist, that is an object of study, not a subject for ridiculous assertions…trust me — not that you would — it is way more complicated than you seem to wish). What is relevant is understanding how the real economy and public policy really work. Ideological claims about free markets and human nature are just so much misty eyed speculation. We do not live in a world where ideological purity is possible (or even desirable). The best that will get you is a cushy job in an ivory tower in Chicago.
January 30, 2010 at 1:00 am
David Housholder
There is no question in my mind that W, were he to have a third term (not possible, but work with me here), would have done exactly the same thing with the stimulus package.
January 30, 2010 at 2:45 am
Daniel Pettit
That requires some big supposing. If Congress was controlled by the Democrats then your theory would probably be right. If the Republicans controlled we probably would have gotten something smaller and more biased toward growth not give aways, though there would be without a doubt plenty of pork to go around.
January 30, 2010 at 2:55 am
Daniel Pettit
How refreshing David in NOLA that you publicly outed the Journal. Hopefully under the evil ownership of Murdock they will see the light of becoming Right 😉
As far as EPI I wouldn’t put much stock in their impartiality give the amount of union funding they get. Just because you have a “consensus” of so called experts doesn’t make their postion correct. Need I mention global warming?
You sound like are open to a fundamental discussion of root causes and realistic meaningful solutions, how about throwing in some concrete thoughts on what you would do it you were King for a day? I’ll throw my 2 cents in below.
January 30, 2010 at 3:19 am
David Housholder
Too much speculation (e.g. What would Tip ONeill have done?). Granted, I started it.
All I am saying is that military spending is still spending. Many Republicans just don’t see that. The congress didn’t press Ronnie or W to spend bazillions on breaking the USSR or turning Iraq and Afghanistan into temporary colonies. That was something the Republicans were passionate about. And they opened our checkbooks to do it.
I concur with Ronnie’s spending and disagree with W’s. That’s just a personal opinion and you don’t get to vote on it. They both had noble intentions. Ronnie got results. Iraq and Afghanistan are a mess and we still haven’t found Bin Laden. We have a (super expensive) military still geared for tank and carrier warfare from WW2. But we can’t find a single guy who took down our towers.
Give me 30 million in Krugerrands and I’ll go find him myself. 🙂
But both efforts were real spending and we have to pay for it. “It was necessary” does not erase the accounting columns. And it doesn’t make you a lesser spender than the Democrats.
January 30, 2010 at 3:55 am
Daniel Pettit
Can’t argue with any of that. Military spending is not mathematically magically different than any other spending. Just more political speak, kind of like how unemployment payments are an “investment”
Oh and I’ll get Bin Laden for 28 million Krugerrands 😉
January 30, 2010 at 3:47 am
Daniel Pettit
Here is my platform:
The big changes need to be gradual as firing all the dead or unneeded government wood would be counterproductive in a recession.
1. Government is too big in scope and $$$s. Ultimately we need to cut it back to explicit authorizations in the Constitution. Only fund: Defense, federal court system, state dept, the basics. No dept of Education, not Endowment for the arts, no public research and all the other pet projects of past Presidents and Congressmen that have cluttered up the federal government.
2. Ultimately cut income taxes drastically to the level needed to fund the limited government our founding fathers imagined. Our 1040’s should have a bunch of check boxes, just like California, where we can contribute extra tax dollars to where we see fit. Abortion funding, arts funding, cancer research, education grants, PBS, scholarships, UN, IMF, and on and on.
3. Immediately freeze spending. ALL spending. Seniors & Gov. Employees are not going to have to switch to dog food because they don’t get a COLA next year. Keep it frozen until the budget is balanced. During that time take money from dead wood to support desired funding increases elsewhere.
4. As a society we need to decide IMHO how are we going to use our military. I don’t like this in-between area of being defensive and the world’s police in a pick and choose way. We should either protect humanity from tyranny everywhere or just mind our own business. Why are we protecting rich countries like Korea, Japan and most of Europe?
5. We need to simply the tax code. No one should have to pay an expert to calculate our taxes. Tens of thousands of pages of code is ridiculous. Sorry H&R but you should be out of business.
6. Simplify regulations and return usurped control to the states.
7. Deregulate much of industry but have real penalties that are actually enforced. I think it was a travesty that Rockwell Intl was able to pretty much stick the taxpayer for their toxic waste cleanup in the 80’s. If the cost of a corporation’s crimes cost the shareholders all their investment then so be it and every employee that had a hand in any crimes should be liable criminally and financially up to 100% of all compensation they ever received while employed there.
8. Congressional term limits.
9. Enforce our borders. It was economically unwise to not before, now in these times it is suicidal. Why did we feel the need to import poverty?
10. Make PC speak, policies and legislation a caning offense also chewing gum and graffiti.
Okay I’m veering too far off topic so I’ll call it a post.
August 7, 2012 at 10:47 am
Green Draconis
With less entitlement spending (free school and free health care in hospital emergency rooms, included) there is less incentive and less problem with illegal immigration. As a percentage, there may have been more illegal immigration 100 years ago, but it was less of a problem for the government. Why? Entitlements.
Also, fewer entitlements makes the US more enticing to businesses and entrepreneur with less cost and less regulatory hassle.
The US military does pretty well in initial wars (Firefighting). However, being police officer (nation building, if you will) tends to be long and expensive and I am not sure that it is a good role for the US (especially if not wanted by a public willing to fight at our side).
January 30, 2010 at 4:16 am
David Housholder
Daniel, great post. Really great post.
I like the constructive tone.
My humble comments:
9) Great idea, not possible. Simply not possible. Our geographical situation creates two massive open shores (more if you count Alaska) and continental land borders that boggle the mind. It is not possible to watch them, let alone defend them. I lived in Montana–there isn’t even a fence there with Canada.
Because I have a good surfboard, I could cross the Mexican border either way at will. Put millions into defending that spot and I could still do it. 100% of the time. A few miles inland from Tijuana and my grandmother could cross at will. Go look for yourself.
Our entire military 24/7 could not cover the borders. It’s not a little line on a map–it’s ginormous. Have you ever flown from Cali to Houston? Right over the border. There is just no way.
All human “wall” projects were disasters. The great wall of China (built for the same reasons) failed. Berlin failed. Iron Curtain rusted.
People will go where they want; you can slow it down but you can’t stop it. Humans migrate and infiltrating is always easier than containing. The smarter question is what do do with them when they get here.
My gut tells me that human mobility just may be a civil right. Have to think about that, but it’s what my gut says. My ancestors were pretty much all economic refugees. Didn’t speak English till the second generation. America was built on importing poverty. Check out your ancestors.
I say give them a number and put them to work. And have them pay taxes.
January 30, 2010 at 4:44 pm
Daniel Pettit
Hous just because we can’t have perfection in protecting our borders we shouldn’t try?? That is job 1 of the government, without national security everything else is moot.
Protecting our Southern border is easy. Take all our troops in Germany give them an umbrella, a machine gun, night-vision and a radio and boom no more human infiltration. No more murdering drug smugglers that out arm our Border Patrol, no more aliens seeking a free handout, and unfortunately no more honest working people looking to improve there lot in life. (This will give the motivated ones a push to do the correct thing and FIGHT for THEIR Country). It will also stop the Jihadists.
But wait you say it is just too much distance. Do the math quick and dirty. 70000 troops from just Germany, divide by 4 shifts= 17500 per shift. 2000 miles (10 million feet) divided by 17500=600 feet between soldiers. Don’t tell me that won’t work and with a decent fence and technology you can get by with less man power. The Berlin wall worked pretty damn well.
As for the rest we need to prepare and build a new framework for the new threat. We are all set to stop an invasion of a large force, that job is done. We need to create a new technology matrix that protects us from the smaller threats that unfortunately can be just as deadly as a full scale invasion. We have lots of options at our disposal but we are not using them.
Why 9 years later we still don’t screen all baggage? How can anyone explain how the underwear bomber ever got on a plane? Treason is how and we need to bring back the gallows if that is what it takes to get our protectors inline. Why are not all cargo ships scanned for radiation?
I’m not calling for a police state and I fully acknowledge that we can’t stop every crazy, foreign and domestic from causing us harm. But we still aren’t doing the basics. If immigration laws were actually enforced how many of the 9/11 terrorists would have even been in the country, much less taking control of our planes?
All I ask is that we try.
January 30, 2010 at 4:26 am
Craig Schinzer
Been reading The Federalist Papers lately,..and the First function of Govt. is Security of the People. In fact that was the main reason the new Constitution was proposed. But there are other reasons, and those are outlined in the Preamble. Unfortunately, the Preamble has been used to expand government more “for the people”.
I find Alexander Hamilton’s warning in the first paper (“and that a dangerous ambition more often lurks behind the specious mask of zeal for the rights of the people than under the forbidden appearance of zeal for the firmness and efficiency of government. History will teach us that the former has been found a much more certain road to the introduction of despotism than the latter, and that of those men who have overturned the liberties of republics, the greatest number have begun their career by paying an obsequious court to the people; commencing demagogues, and ending tyrants”) to be a fair and unobserved warning. After all, once you know I feel your pain, you must agree that only more money should be made available to ease your pain..or even used to punish someone who is causing you to feel bad about your lower lot in life.
Beware of anyone that says “Its for the people”. No boundary exists when curing the ills of “the people” is the prescription.
Matthew 26:11. Selah
January 30, 2010 at 4:44 am
strider651
I often find myself wondering if a significant, neutral third party in the US would stabilize spending. A third party that wasn’t strong enough to do any legislation on their own, but significant enough that the each party would have to woo them to their side to get their bill or spending appropriation passed. There are other countries with significant but weak third parties, I wonder if it helps or hinders. And if it would scale in a behemoth country like the US.
While the US, state and county governments do spend a huge amount of our taxes on social welfare programs, I don’t really blame them. I blame the church. If the church as a body had stepped up to their fiscal and social responsibilities, we wouldn’t need the government to pick up the tab. AND I believe it would orders of magnitude cheaper and more efficient. But we don’t. And the need is still there, and the need is still great.
I can’t say as I really understand the need for any corporate welfare. Take risks, try new markets, make new stuff – or don’t. Decide which fits your company profile better. But why should a blue class worker’s taxes subsidize a big corporation so they can market in India?
In the end, it’s often too complex for my poor little Pooh-brain to handle. Sometimes I sits and thinks. Most times I just sits.
January 30, 2010 at 3:18 pm
David Housholder
Since Krugman’s name has been bandied about, I thought I would put in a link for those of you who’d like to have a look:
http://en.wikipedia.org/wiki/Paul_Krugman
It may surprise you that he’s very much a free-market guy when it comes to international trade. He even prefers sweatshops in the third world to having them live on international aid.
January 30, 2010 at 3:19 pm
David Housholder
Question for you supply-siders:
Are there any disadvantages to supply side thinking?
Are there parts of it that don’t really work?
Or is it perfect?
January 30, 2010 at 7:38 pm
Craig Schinzer
Yes, Dave, supply side has risks. Working in a global economy that can allow companies in some geo areas to ignore enviro concerns, and undercut prices can be a problem.
My motorcycle is an example. The chrome is not as adherent because Germany has strict environmental regulations that increase costs. So the chroming process is not done as well. Honda can chrome in countries that don’t have such strict regs. And they can then provide a product that has a lower immediate cost, but higher long term environmental cost. (Thought long ago that what we need is benevolent dictator).
Now if you are looking for that perfect system..God’s economy is coming. You get the ultimate value for the lowest price that you can pay….and instead of a bogo, you get three in one!
July 31, 2012 at 10:38 am
Germany rebuffs Obama's economic advice, cites U.S. deficit - Pelican Parts Technical BBS
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August 7, 2012 at 10:42 am
Green Draconis
Why do people always focus on the Administration? Yes, Presidents can suggest policy and veto. Presidents also give speeches (Bully pulpit can help encourage businesses or it can make them nervous about risk/profit/investment – yes, hiring is an investment) and can help./hinder the economy through regulatory administration.
However, there is a saying: “Congress holds the purse strings”. Congress writes laws and sets the budget and the Senate holds more power there.
Take a look at the control of Congress in the above graphs and it may paint a different picture.
The younger President Bush considered himself a “Compassionate Conservative”, which is to suggest a fiscally liberal policy. The support of Congress during his time (combined with wars) led to increases in debt.
Great debt reduction and positive economic times happened in the late 90’s when the Republicans held control of Congress and were focused on conservative fiscal policy. Combined with President Clinton this led to a good economy for most.
In the past 20 years, banks were “encouraged” to make foolish, risky loans to those who could not afford them – both in schools loans and home loans. As such, there have been increases in prices over some of that time (artificially creating increased demand) and record number of defaults. I suggest making loans stricter.