One of the greatest stumbling blocks when comparing how well the U.S. economy does under Democrats vs. Republicans is the four years of the Carter Administration. Republicans like to point to the economic “failure” of Jimmy Carter and the economic “success” of Ronald Reagan. Democrats point to the economic “success” of Bill Clinton and the abject failure of Bush-43. The Bush-41 Administration is rarely mentioned by either side, considered simply a continuation of the Reagan Presidency, sans the economic or historic achievements. The end result: Stalemate.
The “Balance Sheet” looks like this:
|Republican view||Democratic view|
|Carter:||Economic and political disaster ending in high unemployment, high gas prices and high interest rates.||An honest and deeply religious man voted in following the scandal-plagued Nixon Administration to restore America’s faith in government.|
|Reagan:||Turned the Carter economy around, cut taxes, cut unemployment, lowered gas prices and “won” The Cold War.||More than doubled 200+ years of National Debt by the end of his presidency, “solving” every problem by putting it on the National Credit Card (ie: “he borrowed it”), including spending the Soviet Union into oblivion by forcing them into a costly arms race that bankrupted their country (and nearly ours too in the process.) Reagan also RAISED taxes four of his eights years in office to offset the exploding National Debt he saw himself creating.|
|Bush-41:||The less said about him, the better. “Was no Reagan”. “Would of won reelection were it not for that danged Ross Perot.”||Called Reagan’s economic plan of increased spending while cutting taxes, “voodoo economics”. Then tried to do Reaganomics without the tax cuts. Presidency ended in Recession, giving rise to the Clinton battle-cry: “It’s the economy, stupid!”|
|Clinton:||A “philandering, pot-smoking draft-dodger.” Credit for his economic success is given to the Republican control of Congress following their capture of both houses of Congress in 1994 (reversing 44 years of unbroken Democratic control of the House.) Impeached for lying to Congress about having an affair with a young intern that “disgraced the office of the president”. Left with an economy “headed for a recession”.||Reversed 12 years of Reagan/Bush economic disaster, brought unemployment to a 40-year low, streamlined and shrank the size of government, balanced the Budget and left his successor a projected surplus of $250 Billion dollars. “Impeachment” was the result of an eight-year Republican witch-hunt with a Special Prosecutor (Ken Starr) who leaped from one phony “gate” (Whitewater, “trooper-gate”, even Socks-the-cat’s Fan Club was investigated for misappropriation of tax dollars to buy stamps for his newsletter) to the next, until they were able to get him for lying under oath regarding a personal matter.|
|Bush-43:||“Inherited” a Recession from Bill Clinton, made worse by the attacks of 9/11. Cut taxes across the board. “Liberated” Iraq and “got” Saddam Hussein.||The Republicans in control of Congress during the “Clinton economic success” were THE VERY SAME REPUBLICANS in control of Congress when Bill Clinton supposedly “handed Bush-43 a recession”. Bush-43: all the spending of Reagan without the tax increases. You know the rest.|
(In January of 2009, The Wall Street Journal crunched the numbers to find that George W. Bush had the worst job-creation record of any president in history… beating out even Herbert Hoover.)
After six years of anemic… even negative… economic growth under George W. Bush, skyrocketing National Debt, climbing oil/gas prices, many major American corporations in financial crisis, and two wars in the Middle East that seemed destined to go on forever, the American people switched control of both houses of Congress back to the Democrats in 2006… ensuring that the economic timebomb left by their predecessors would go off on their watch. Conservatives typically lay all the blame for the economic crisis and implosion of Wall Street towards the end of his presidency at the feet of Democrats that retook control of Congress in 2007.
Yet, Republicans also give Dubya a pass on his first six years as well: “Bill Clinton” & “9/11″ were to blame for that. Up until the day President Bush left office, Republicans were still blaming Bush’s every failure on Bill Clinton. And yet somehow, magically, 9/11 was no longer to blame after Democrats took control of Congress in 2007, nor was Bush to be blamed after Barack Obama took control of the WH in 2009. Instead, now, when President Obama blames his predecessor, Republicans whine about all the finger-pointing. Last year, Mike Huckabee… in a heroic act of extreme cognitive dissonance… claimed that after his election, President Bush never whined about his predecessor. I kid you not.
All this plays into The Great Debate over “who handles the economy better: Democrats or Republicans?” And that takes us to Jimmy Carter.
I remember life in the late 70’s under President Carter. I remember “gas lines”, high unemployment, high interest rates, and a seriously unpopular move to switch America over to “the metric system”. You’d of thought people were being forced to eat tofu-burgers washed down with a soy milkshake. The anger (in Texas at least) was palpable. (Interestingly enough, that is how the “2-Liter soda bottle” came about, and why most car speedometers now include both KPH (“Kilometers per hour”) as well as MPH.) I also remember “solar panels on the roof of the White House” and public cries to “buy American” as the auto industry started to collapse following high gas prices (sound familiar?)
There are two key indicators regarding the health of the U.S. economy: “Unemployment” and “The National Debt.” The two biggest spenders who account for 8 of the $12 Trillion dollar National Debt we have now are Ronald Reagan ($2Trillion) and George W. Bush ($5Trillion). Bush-41 accounts for another $1T. The debt when Jimmy Carter entered office was just under $700B and just over $900B when he left. When Bill Clinton left office, the Debt had actually started to SHRINK, and the $2T President Obama has added to the Debt in his first year are the result of unfunded mandates, tax cuts, two wars, and recovery packages left over from the Bush-43 Administration.
I took the annual National Debt figures since 1900 from The U.S. Treasury website and put them in a spreadsheet. Here is the resulting graph:
The first significant increase in the Debt (in gray) is World War II, where the Debt remained reasonably flat for the next 30 years. The Debt started to climb as the Vietnam War came to a close (1972-1975), following roughly the same trajectory until the end of the Carter Administration in 1981 (the first blue column).
In 1982, as Carter’s final budget expired, the Debt took off like a rocket, more than doubling by the end of Reagan’s term in 1989. The rate of growth in the Debt continued to rise at the same pace through the Bush-41 Administration and halfway into the Clinton Administration.
In Clinton’s second term, the rate of increase finally started to slow, even leveling out by his last year in office (2000). Then George W. Bush took office.
After the final Clinton budget expires, the Debt takes off like a bat out of Hell, nearly doubling the National Debt by the time he leaves office in 2009.
The last year in the graph is the first year of President Obama’s presidency and the final Bush budget, and naturally, the Debt continued the same trajectory for that first year as it has for every president before him. Notice it took Bill Clinton until his second term to finally get the Debt under control and start to turn things around.
The second significant fact in judging economic success is “the Unemployment Rate”. The U.S. Bureau of Labor Statistics offers a colorful yearly map of the unemployment rate every year since 1976:
(Unemployment figures as of June 30/July 1, the middle of each year)
Items of interest:
- Unemployment under Jimmy Carter went DOWN every year prior to the Iranian hostage crisis and trade embargoes with Russia in his final year.
- Unemployment continued to spike more than a year after Reagan took office, rising more than two full percentage points his first year, peaking just below 10%.
- The Unemployment Rate for Carter’s final year in office was lower than the Unemployment Rate of Bush-41’s final year in office.
- Unemployment went UP EVERY YEAR of the Bush-41 Presidency.
- Unemployment went DOWN EVERY YEAR of the Clinton Presidency.
- Not shown, the unemployment rate on the day President Bush-43 left office was 7.2%. Unemployment continued to spike more than a year after Obama takes office, rising more than two full percentage points his first year to just below 10%, just as it did with Reagan.
So, to recap: Under the “Liberal” Jimmy Carter, the National Debt rose 22% (from just under $700B to just over $900B) and unemployment went down the first three years of his presidency. The year he left office, unemployment had spiked to just over 7 percent.
Under “Conservative” George W. Bush (Bush-43), the National Debt grew 194%, and the year he left office unemployment had spiked to just over 7 percent.
Under Ronald Reagan, unemployment continued to rise to nearly 10% following his first year in office.
Under Barack Obama, unemployment continued to rise to nearly 10% following his first year in office.
When Bill Clinton left office, he “handed his successor a Recession”, for which the Republican Congress was blameless.
When Bush-43 left office, the Democratic Congress “handed his successor a Recession”, for which the prior President is blameless.
When Bush-43 complained incessantly for eight years about the economy and state of the military left to him by his predecessor, that was justified.
When Barack Obama complains about the economy and the state of the military left to him by his predecessor, that’s “whining”.
Are you seeing a pattern yet?
UPDATE: The Wall Street Journal reported (01/2009) on the job creation records of the last 11 Presidents (going back to Harry Truman). Three of the four top job creators were Democrats (with two-term Reagan – 16m – edging out one-term Carter – 10.5m – by only 5.5 million jobs). Gerald Ford had the worst record (1.8m jobs), followed closely by Bush-41 and Bush-43 creating a paltry 2.5 and 3.0m respectively. Bill Clinton had the best record with 23.1m jobs created during his eight years in office.)
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