There is a famous quote of President Reagan saying that it is unfair to sailors to say that Democrats spend like drunken sailors. (Video below.)
This anecdote reinforces a myth, one that the GOP believes, and as Reagan wanted his listeners to infer, that he and those like him do not spend other people’s money.
Of course ALL politicians are elected to spend our nation’s money and to govern us. So the virtue here becomes a matter of fiscal responsibility. We entrust our politicians with the power to tax or borrow and spend for the public good. Since most of our taxes are calculated as a percentage of income, in good times tax revenue rises in proportion to economic activity; but in bad times, when people and businesses make less, tax revenue drops.
It takes money to make money. In bad times businesses and individuals reduce spending and borrow as necessary to survive and stay productive. That is the essence of fiscal responsibility, balancing the spending, borrowing, and revenue for long-term benefit.
The GDP or Gross Domestic Product is one measure of national prosperity. So by comparing debt to GNP we get a crude picture of fiscal responsibility. If one’s income is strong, it stands to reason one can handle more debt.
Let’s assume that the drunken sailor inference is correct. What would it look like if Republican administrations operated on balanced budgets and only Democratic administrations spent money they didn’t raise during their tenure – in effect spending money they did not have. We adjust the GOP spending to balance the GOP years’budgets, and leave the Dem spending at historically accurate levels. Here is the chart:
The green line shows that the national debt today would be about $13.5 trillion lower and at a modest 30% of GDP.
It is a shameful deceit to perpetuate the myth of fiscal responsibility for either party. But it sure looks like the GOP could man up a bit here and stop making a joke about who is spending whose money.
The G W Bush administration inherited a thriving economy and a budget surplus. It cut taxes, pushed us and panicked the congress into costly wars in Iraq and Afghanistan. Under the doctrine of deregulation it looked away as too-easy home mortgage money over-revved the housing market and blew the country’s economic engine triggering a world wide banking and economic crisis. Meanwhile it ignored the nation’s decaying infrastructure, rising poverty, run-away incarceration, and a plethora of other domestic problems.
Barack Obama, running on a vague and undefined platform of change you can believe in inherited an economy on the skids, a deficit budget, and the clear need to borrow huge sums of money to avert financial disaster. Increasing taxes, even a simple reversal of the Bush tax cuts, in order to be more fiscally responsible was out of the question. Abruptly curtailing our military expenditures wasn’t possible either. Notwithstanding, notice that he did manage to slow the hemorrhage. The curve is less steep now than it was when he took office, and the next president will, in all probability, inherit a prospering nation.
Neither Democrats nor Republicans spend their own money, but it sure looks like Dems are more “sober” and they get better results.