Tax And Spend
I wanted to write a little more on the common belief that Democrats are irresponsible tax-raising spendthrift liberals and conservatives are fiscally responsible tax-cutting advocates of small government.
First, it's somewhat true. Republicans do cut taxes generally and personal income taxes particularly. As a percentage of GDP, gross personal income tax receipts do go down under Republicans and up under Democrats. As a percentage of GDP, personal income tax receipts went up under Carter and Clinton and down under Nixon/Ford and Reagan/Bush.
But as my friend ponsdorf points out that's just half of the problem. The other half is deficits - fiscal responsibility. Democrats might be raising taxes, but are they raising spending even more? Republicans might be cutting taxes, but are they also cutting spending? Here's the other half of the equation. Spending increased under Ford/Nixon. Both Bush and Reagan increased spending during the middle of their term and cut back down at the end, possibly to make their books look good for their elections. Bush Jr. increased spending substantially, particularly at the end. Only Clinton, that tax and spend liberal, consistently and substantially cut spending throughout his term.
If you put the two trend lines together you can see the gaps appear. The larger the gap, the more irresponsible the spending. The gaps are wide under Reagan and both Bushes, and narrow under Carter and especially Clinton, whose cost-cutting was so aggressive that he actually ran a surplus four years in a row.
I don't think the evidence supports conventional wisdom about taxing and spending. Democrats *do* raise taxes, but they have done so while maintaining or reducing spending to reduce deficits. Democrats are "Tax And Don't Spend". Republicans, in contrast, cut taxes which everybody loves but don't actually cut spending to pay for their largesse. They are "Don't Tax, Just Spend". I don't know about you, but I'd much rather support a party that appears to understand the importance of responsible spending.
Caveat: The shrewd observer will note one major caveat: the trumpet-shaped gap opening at the end of Bush's and beginning of Obama's term. That's the Keynsean deficit spending plan kicking in, by intent and design, to keep the economy from taking an even worse hit (and reducing the nation's taxable income and tax receipts even further) by spending stimulus, cutting taxes, and running a very large deficit. The consensus seems to be that the policy worked. But nobody wants the stimulus spending and deficits to go on forever. Now that the recession might be "over" (has stopped getting worse) the Obama administration has been signaling that they're moving away from stimulus and toward deficit reduction. If Obama is a liberal Democrat in the spirit of Clinton and Carter he'll increase taxes while cutting spending, possibly under the political cover of a bipartisan deficit commission to say together what neither party wants to say on their own.
Second Caveat: I suspect that Democrats have more success cutting spending than Republicans not necessarily because they're morally superior or more inherently responsible but because it's easier for them. If you're a responsible and well-intentioned Republican with a big boner about the military it's hard to find as many options for deficit reduction when 63% of the discretionary budget is off the table. If you're only willing to cut the programs that don't cost anything you're not going to make a big dent.
The above graphs were modified by me from graphs featured in the in depth look at the Federal budget by 538dotcom_feed. If you enjoy persnickety objective analysis with lots of inscrutable charts (and goodness gracious who doesn't?) 538 is well worth reading.
Update: An index of national debt by US Presidential term puts the problem in even starker contrast. Since 1977 Reagan and both Bushes increased the debt-to-GDP ratio an average of 12% per term, while Carter and Clinton decreased the same figure an average of 4.3% per term. (Thanks, Artwells.)
First, it's somewhat true. Republicans do cut taxes generally and personal income taxes particularly. As a percentage of GDP, gross personal income tax receipts do go down under Republicans and up under Democrats. As a percentage of GDP, personal income tax receipts went up under Carter and Clinton and down under Nixon/Ford and Reagan/Bush.
But as my friend ponsdorf points out that's just half of the problem. The other half is deficits - fiscal responsibility. Democrats might be raising taxes, but are they raising spending even more? Republicans might be cutting taxes, but are they also cutting spending? Here's the other half of the equation. Spending increased under Ford/Nixon. Both Bush and Reagan increased spending during the middle of their term and cut back down at the end, possibly to make their books look good for their elections. Bush Jr. increased spending substantially, particularly at the end. Only Clinton, that tax and spend liberal, consistently and substantially cut spending throughout his term.
If you put the two trend lines together you can see the gaps appear. The larger the gap, the more irresponsible the spending. The gaps are wide under Reagan and both Bushes, and narrow under Carter and especially Clinton, whose cost-cutting was so aggressive that he actually ran a surplus four years in a row.
I don't think the evidence supports conventional wisdom about taxing and spending. Democrats *do* raise taxes, but they have done so while maintaining or reducing spending to reduce deficits. Democrats are "Tax And Don't Spend". Republicans, in contrast, cut taxes which everybody loves but don't actually cut spending to pay for their largesse. They are "Don't Tax, Just Spend". I don't know about you, but I'd much rather support a party that appears to understand the importance of responsible spending.
Caveat: The shrewd observer will note one major caveat: the trumpet-shaped gap opening at the end of Bush's and beginning of Obama's term. That's the Keynsean deficit spending plan kicking in, by intent and design, to keep the economy from taking an even worse hit (and reducing the nation's taxable income and tax receipts even further) by spending stimulus, cutting taxes, and running a very large deficit. The consensus seems to be that the policy worked. But nobody wants the stimulus spending and deficits to go on forever. Now that the recession might be "over" (has stopped getting worse) the Obama administration has been signaling that they're moving away from stimulus and toward deficit reduction. If Obama is a liberal Democrat in the spirit of Clinton and Carter he'll increase taxes while cutting spending, possibly under the political cover of a bipartisan deficit commission to say together what neither party wants to say on their own.
Second Caveat: I suspect that Democrats have more success cutting spending than Republicans not necessarily because they're morally superior or more inherently responsible but because it's easier for them. If you're a responsible and well-intentioned Republican with a big boner about the military it's hard to find as many options for deficit reduction when 63% of the discretionary budget is off the table. If you're only willing to cut the programs that don't cost anything you're not going to make a big dent.
The above graphs were modified by me from graphs featured in the in depth look at the Federal budget by 538dotcom_feed. If you enjoy persnickety objective analysis with lots of inscrutable charts (and goodness gracious who doesn't?) 538 is well worth reading.
Update: An index of national debt by US Presidential term puts the problem in even starker contrast. Since 1977 Reagan and both Bushes increased the debt-to-GDP ratio an average of 12% per term, while Carter and Clinton decreased the same figure an average of 4.3% per term. (Thanks, Artwells.)