Tax-and-Spend Democrats, Small Government Republicans and other Myths

A few years ago, I attended an industry meeting at which TJ Rogers, CEO of Cypress, gave the keynote speech. Shortly after dessert was served, a color guard complete with blaring bagpipes followed a kilted TJ Rogers up to the podium. That night, TJ turned my beliefs about the fiscal policies of Democrats and Republicans upside down. I dedicate this posting not to TJ though, but to his former corporate controller, who claims he did the work.

Here are a few facts for your amazement and amusement.

All of the data is presented in real terms using chained 2000 Dollars from 1929 through 2009. The source for all spending, GDP, income and tax figures is the Congressional Budget Office. Data about the make-up of congress is from One Simple Idea. In addition, the data is grouped by congressional session (2 years).

The two largest spending hikes were enacted during FDR’s administration with Democratic majorities in both houses. Of course the largest was from 1943 to 1945 due to World War II when spending jumped 266% to 40% of GDP. The second largest was from 1933-1935, at the start of the Great Depression. The Republicans fill the next two spots. Hoover (1931-1993), also at the start of the Great Depression and Eisenhower (1953-1955) as the Cold War started, both times with Republican majorities in congress, raised spending 56% and 49%, respectively. FDR rounds out the top-5 list with a distant 19% increase. Obama and the Democratic majority have enacted an 8.5% increase in the first year of the congressional session. They could be in the top five by the time this session is over.

To be fair though, we have to examine total spending rather than just spending hikes on a percentage basis. If we exclude the World War II years (1943-1947), Obama and our Democratic congress will top the list of spenders at 21.8% of GDP. However, the next three top spenders were Republican presidents with Democratic congresses. Reagan (1981-1985) at 21.1%, GWH Bush (1991-1993) and then again Reagan (1985-1987) are next on the list, each at 20.9%. Clinton and a Democratic congress (1993-1995), round out the top-5 at 20.8%. Ford (1975-1977), Eisenhower (1953-1955), and GW Bush (2007-2009) were also members of the “20% Plus” club. Mean spending as a percent of GDP since Eisenhower (1953) has averaged 19%. Carter (1977-1979) and a Democratic congress would be the only new member of the “19% Plus” club.

The longest consecutive streak of spending cuts relative to GDP was from 1995 to 2001. Clinton, with Republican majorities in both houses, cut spending as a percent of GDP from 19.8% to 17.8%. Those were the good old days.

Stay tuned for who’s paying for the spending.

Real Spending vs GDP

Senate Seats vs. Spending

House Seats vs. Spending

Real Spending per Capita

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