Borrow & Spend! Borrow & Spend! How American.
“United States National Debt
(1938 to Present)
An Analysis of the Presidents Who Are Responsible For Excessive Spending
By Steve McGourty
Updated 25 June 2006
The chart [below] (click here to see the chart) shows the United Stated national debt (per Microsoft’s Encarta Encyclopedia and US Government data) with the various Presidents’ terms marked by vertical lines. Under President Clinton the growth in debt ceased, but note the radical change in direction debt has taken since George W. Bush entered office. There is no question that the steepest upward rises in debt take place after President Reagan was elected when so called Conservative Republican Presidents are in office (see red below).
If you look at the debt starting with Truman’s term (and remove Roosevelt’s WWII debt) the difference between the two parties contributions to our national debt level change considerably. Since 1946 the Democratic Presidents increased the national debt an average of only 3.7% per year when they were in office. The Republican Presidents stay at an average increase of 9.3% per year. Over the last 59 years Republican Presidents have out borrowed Democratic Presidents by almost a three to one ratio. That is, for every dollar a Democratic President has raised the national debt in the past 59 years Republican Presidents have raised the debt by $2.87.
Prior to the Neo-Conservative take over of the Republican Party there was not much difference between the two parties debt philosophy, they both worked together to minimize it. However the debt has been on a steady incline ever since the Reagan Presidency. The only exception to the steep increase over the last 25 years was during the Clinton Presidency, where he brought spending under control and the debt growth down to almost zero.
Comparing the borrowing habits of the two parties since 1981, when the Neo-Conservative movement really took hold and government spending really has gone out of control, it is extremely obvious that the big spenders in Washington are Republican Presidents. Looking at the only Democratic President since 1981, Mr. Clinton, who raised the national debt an average of 4.3% per year; the Republican Presidents (Reagan, Bush, and Bush) raised the debt an average of 10.8% per year. That is, for every dollar a Democratic President has raised the national debt in the past 25 years Republican Presidents have raised the debt by $2.59. Any way you look at it Conservative Republican Presidents can not control government spending, yet as the graph [above] clearly shows, President Clinton did.
Truman, Eisenhower and Kennedy all worked vigorously to keep spending under control. Of the seven years Truman was in office, the national debt came down in four of those years. Three of the eight years Eisenhower served as President saw debt reduction. Kennedy reduced the debt by over 4% his first year in office, then it went up slightly his next two years. While the debt did go up every year during Johnson’s time in office, he was the last president before Clinton to submit a balanced budget. Johnson’s average was a debt increase of 3% for the five years he served.
Even Nixon only had one year where he raised the debt more than 6%, his average was 5% for the six years he was in office. Between uncontrolled inflation and Ford’s conservative bend the debt increased 17% his first year in office, 13% his second. Ford’s plan to impose a policy of price controls failed to bring government over spending under control.
President Carter tried to control government spending even during inflationary times. He increased the national debt 9% per year while he was in office, and his policies eventually brought inflation under control in spite of Congress and Reagan’s loose spending habits.
President Reagan repeatedly called for a balanced budget amendment to the Constitution, yet never submitted a balanced budget himself. Many blame the Democratic Congress for the “big spending” during his administration. The facts are that Reagan was able to push his tax cuts through Congress, but he never pushed through any reduced spending programs. His weak leadership in this area makes him directly responsible for the unprecedented debt increase that took place during his time in office. The debt increased at an average of 13.8% for every year Mr. Reagan was in office, the highest average of any President since this nation was founded, and he still holds that record. From 1983 through 1985 the debt was increasing at over 17% per year. While Mr. Reagan was in office this nation’s debt went from just under 1 trillion dollars to over 2.6 trillion dollars, a 260% increase. The sad part about this increase is that it was not to educate our children, or to improve our infrastructure, or to help the poor, or even to finance a war. Reagan’s enormous increase in the national debt was not to pay for any noble cause at all; his primary un-apologetic goal was to pad the pockets of the rich. The huge national debt we have today is a living legacy to his failed Neo-Conservative economic policies. This unwanted weight continues as an onerous burden on this nations financial resources.
George Bush Sr. meekly followed in Reagan’s shadow, by increasing the debt on average a mere 11.8% a year during his four years as President. His last year in office he worked with Democrats to raise taxes to help reduce the massive yearly increases in debt, it was too little too late and didn’t make much difference in the overall trend, but the Neo-Conservatives threw him out of office for it any way.
President Clinton inherited the deficit spending problem and did more than just talk about it, he fixed it. In his first two years and with a cooperative Congress he set the course for the best economy this country has ever experienced. Then he worked with what could be characterized as the most hostile Congress in history for the last six years of his administration, yet he still managed to get the growth of the debt down to 0.32% (one third of one percent) his last year in office. Had his policies been followed for one more year the debt would have been reduced for the first time since the first year of the Kennedy administration.
The current President Bush came into office and quickly turned all that progress around. He immediately gave yet another massive tax cut based on a failed economic policy; perhaps an economic fantasy describes it better. The last year Mr. Clinton was in office the nation borrowed an additional 18 billion dollars, the first year Mr. Bush Jr. was in office he had to borrow 270 billion. The tax cut that caused this borrowing was supposed to stimulate the economy, but two years later Bush had to push through yet another tax cut. The second tax cut was needed because it was clear that the first one did not work. Economic history tells us the second did not work either. As a result of all his tax cutting and no cutting in spending President Bush set a record in 2003 for the biggest single yearly dollar increase in debt in the nation’s history, he did it again in 2004. The debt is now increasing at the rate of 600 billion dollars a year. Even Mr. Reagan never increased the debt that much in a single year; Mr. Reagan’s biggest increase was only 282 billion, half of GWB’s outrageous spending. As a result of the fact that the debt was already pretty high when Bush Jr. entered office his annual rate of increase is only averaging 7% per year, so far.
Trickle Down Theory Myth
History has shown that the “trickle down theory” does not work. President Hoover tried the “trickle down theory” (his words) to solve the economic problems the last few years of his only term when the greatest economic depression this country has ever faced began. It did not work and things got worse. President Roosevelt got into office, raised taxes on the rich, created jobs for the poor and turned things around. Mr. Reagan employed the failed theory again in the ‘80’s and again it did not work. The rich got richer, but the poor got poorer and so did the economy. Mr. Bush Sr., who always had a problem with the “vision thing”, continued the failed policy of his immediate predecessor. Mr. Clinton took a more progressive approach and turned the model upside down. Instead of making the rich richer in the hope that they will spend that money and thus create demand and therefore jobs, he created a tax environment that encouraged the creation of jobs and created an economic environment where everyone could get rich, not just a few, and it worked. Millions of jobs and thousands of new millionaires were created while he was in office. President Bush Jr. snuck into office and once again applied the old trickle down model and immediately created a need to raise the debt level to pay for an unneeded tax cut in 2001. Predictably the nation lost jobs and there are fewer millionaires. Not learning from his past mistakes Bush pushed through yet another tax cut in 2003, 2005 and 2006. He and his lap dog Congress are not learning from their mistakes. As a result the National Debt has continued to increase an average of $1.93 billion per day since September 30, 2005.
While it is a great sound bite, the facts show that the Republican “tax and spend” rhetoric about Democrats is not based on the facts. The facts do show that it takes a Democratic President to control and reduce spending. The truth is that the Republicans are the party of “borrow and spend”. They hate taxes, but love to spend; their solution is to put off till later paying for our security today, they prefer to see our children pay our taxes. Neo-Conservative thinking has run up over a 8 trillion dollar debt that will not be paid off for a generation or more, and it is still increasing at a record setting rate with no end to the increases in sight.
In 2002 the debt tax was eighteen cents out of every federal tax dollar. This tax is used to pay the interest on the existing national debt, and puts nothing toward principal. If Conservatives really want to lower our taxes, they should lower the debt tax. That would insure a permanent tax cut for the whole country (but it would not help them with their apparent goal to further concentrate the nation’s wealth in the hands of a few).
Political Labels No Longer Accurate