Deficit Hawks?

One of the things that always sticks in my craw is how conservatives tell us they have always been the deficit hawks and how the Democrats are the so-called "tax and spend party." I guess the beats the "just spend party." Economists have argued about the importance of budget sanity. Financial advisors will tell you that it is always best to borrow when interest rates are low and it is always best to save when rates are high. Others will tell the deficit (and corresponding debt) is evil and must be stopped.

I only know enough about economics to have taught it for several years at the high school level. I'm not going to get in the middle of an economists pissing match. After all, they seem to be so over the place that I don't know how much will get on me. I thought I would throw up a few charts. Before I do I might offer some caveats. First, Congress is responsible for passing budgets. The president signs them. So, all of you Obama haters can take a step back and take a deep breath.

I would throw in all of these into the post indivually, but they are better seen as a group. Since the Obama presidency is less than half-way through its first term, the charts only go through Bush. For those that don't want to go through all the information I thought I would give a good summary. There were twelve combined administrations included (Kennedy and Johnson were combined, Ford and Carter were combined, and Coolige and Harding were combined). We start with Woodrow Wilson. The top five presidents in terms of positive taxes levied and outlays spent (ie surplus or balanced budget) are first. All presidencies are judged based on where they finished in percentage deficit.

1.  Bill Clinton  -13%
2.  Dwight Eisenhower 0%
3.  Harry Truman 1%
4.  Woodrow Wilson 1%
5.  Richard Nixon 2%

There is a mixture of Republicans and Democrats, but none of the Republicans are a part of the modern incarnation fo the party. Liberal Democrats consider Bill Clinton to be too pro-business while many Republicans disown Richard Nixon and Dwight Eisenhower politically. At first it would seem to be a huge victory for moderates. Now, let's take a look at the bottom five from the century. They will be listed in descending order.

1. Franklin Roosevelt 50%
2. Coolidge/Hoover 45%
3. George H.W. Bush 21%
4. Ronald Reagan 15%
5. George W. Bush 13%

Okay, time for the SAT question. Which of these does not belong? If you answered Franklin Roosevelt then you would be right. He is the only Democrat in the list. For those that know their history they can already explain this one. Forget about the Depression and just look at the chart for Herbert Hoover's term. He was in negative deficit mode until about 1930. At that point, government spending shot up and he went to the level of deficit you see here. So, Roosevelt's spending has to be seen in some perspective.

Keep in mind that Bush's deficit will have a direct impact on Obama's. Congress passed the TARP before Obama took office, so it will be easy to cry about his spending even though the president doesn't pass any spending bills (Congress does) and it was passed by the Congress before he could sign it.

In the interest of full disclosure I thought I should point out that Ford/Carter came close to the top five with a 12 percent deficit. However, I would be remiss to also point out that the deficit rate when Carter took office stood at about 13 percent and dropped to 11 percent when Carter left office in 1981. So, if I were to put someone on the hook it would have to be Gerald Ford. This is especially true considering that his predecessor had deficits under control.

Now, what does all of this mean. Remember that I did not take sides in the fight between deficit apologists and deficit hawks. Truth be told, there are times to go into debt and times to tighten the belt. So, I cannot claim bad economies based simply on percentage deficit. What I can do is blow a hole in the theory that the Republican party is the party of fiscal responsibility. I would argue the opposite in fact. They are party of deficits and debt. Again, those things are not necessarily bad. It is bad though when you sell yourself on something you are not.

Individual Democrats and Republicans can claim individual records of fiscal responsibility. However, unless your name is Bill Clinton you cannot claim a record of fiscal responsibility as a president. A Republican Congress helped a lot and deserve credit, but I also remember Clinton vetoing a lot of budgets. So, the next time you hear a group of Republicans claim they are for responsible spending and balanced budgets make sure you hang onto your wallet.