August 09, 2004
The Party of Economic Responsibilty
Here's a provocative article from the LA Times that looks at the economic records under both parties since 1960. The conclusion:
It turns out that Democratic presidents have a much better record than Republicans. They win in a head-to-head comparison in almost every category. Real growth averaged 4.09% in Democratic years, 2.75% in Republican years. Unemployment was 6.44%, on average, under Republican presidents, and 5.33% under Democrats. The federal government spent more under Republicans than Democrats (20.87% of GDP, compared with 19.58%), and that remains true even if you exclude defense (13.76% for the Democrats, 14.97% for the Republicans).What else? Inflation was lower under Democratic presidents (3.81% on average, compared with 4.85%). And annual deficits took more than twice as much of GDP under Republicans than Democrats (2.74% of GDP versus 1.21%). Republicans won by a nose on government revenue (i.e., taxes), taking 18.12% of GDP, compared with 18.39%. That, of course, is why they lost on the size of the deficit.
Unfortunately, the author doesn't provide links to the spreadsheets he used or the data itself, but, to be honest, I'm not going to take the time to double-check the math. It would be interesting to see an analysis of the potential causes for these results to determine if the president's policies caused, at least in part, in the results. That sounds like a dissertation topic though and I'm no economist.
The USA has a tradition of pursuing five important and highly effective policies to ensure the economic well-being of its population:
(i) Keeping the currency strong; (ii) Keeping the interest rates low; (iii) Keeping the minimal wage high; (iv) Stimulating consumption; (v) Prioritise investiments rather than balancing the budget.
Any other Country who tried a different orientation in regard with these five points has failed enormously. Unfortunately, there are the non-wise self-proclaimed economists advising Countries to do otherwise.