The Party Of Fiscal Conservatism

by hilzoy

In a recent comment, Edward wrote: "What we're learning is that the only party in favor of fiscal responsibility is the party out of power." With respect, this is not true. There is one party that has a consistent record of fiscal responsibility over the last few decades, and one party that has a consistent record of fiscal irresponsibility. It's important to be clear on this, especially since, as I prowl around the conservative blogs, I see various expressions of relief that for all his grand promises the other night, at least we can count on Bush not to engage in the sort of irresponsible spending that Democrats might propose. There is a myth out there according to which Democrats are the party of "big government", while Republicans are normally the party of fiscal conservatism, a party which is having an unfortunate momentary lapse. This is just not true.

Historical data on the budget deficit is here (and here as a percentage of GDP). Here are tables for discretionary spending in dollars and as a percentage of GDP. Here is historical data on the public debt from 1950-2000 and 1997-present. And here is data on the size of the Federal workforce from 1960-2000. This is all government data; it does not come from murky partisan sources. I have checked the graphs that follow against these figures; I present them so that you can too.

Here is a graph of the deficit over the last 35 years, in current and constant dollars:

As you can see, not only was Clinton's presidency a time of real fiscal responsibility; so was Carter's (check out the constant dollar graph.) By contrast, while the tax bill of the mid 80s helped a bit, the general trend under Republicans has been towards greater deficits, and George W. Bush has been a complete budget-buster.

Ha ha, you may say: Clinton, being a Democrat, was undoubtedly a big spender, who was saved from bloated deficits only because the booming economy allowed tax revenues to mask the fact that he was spending money like a drunken sailor. Um, no (pdf):

As you can see, under Clinton discretionary spending scarcely rose at all. As a percentage of GDP, it shrank from 8.2% in 1993 to 6.3% in 2000. If you look here, you'll see that domestic discretionary spending has increased more than twice as fast under George W. Bush as it did under Clinton -- and that's only through 2004; it doesn't include anything related to Hurricane Katrina, or even the pork-laden highway bill. It was also virtually unchanged, as a proportion of GDP, under Carter.

I could go on -- here, for instance, is data on the size of the Federal civilian workforce, excluding the Postal Service, from 1960 through 2000. Amazingly enough, it shows that between 1993 and 2000, this number dropped by 372,812 employees, or about 17.3% of its 1993 total. (Remember Clinton's 'Reinventing Government' program? It worked.) But the Federal civilian workforce also barely rose under Carter -- it grew by about 1,000 people per year, as opposed to about 7,500/year under Reagan.

One last statistic: as best I can figure it, using the debt data linked above, during the time that Reagan and the two Bushes were in office, the Federal government racked up about 68% of our current outstanding debt. While Clinton and Carter were in office, by contrast, it only accumulated about 23%. (I suspect this understates the difference between the two parties: I counted all of 1993 as Clinton and all of 2001 as Bush II, even though in both cases the budgets they started out working with had been passed under their predecessors. Clinton was more fiscally responsible than Bush 1, so sticking him with debts incurred under a Bush 1 budget hurts him; he was, of course, dramatically more responsible than Bush 2, so counting debt incurred under a Clinton budget to Bush 2 helps Bush.) The Republicans have been in office for 17 years, while the Democrats have only 12 between them, but that doesn't come close to accounting for their different records: per year, Republicans racked up about twice as much debt as Democrats.

Democrats support fiscal responsibility when they are out of power, and they not only support it but enforce it when they are in power. Republicans claim to support both fiscal responsibility and lower taxes when they are out of power, but their record in power completely belies the idea that they are committed to fiscal discipline. The idea that Republicans in power have anything at all to do with fiscal responsibility is a myth, and we should not believe it.

Comments

[Tacitus]

A convincing argument, assuming you think the Congress doesn't matter a whit where Federal spending is concerned.

I'll let you puzzle that bit out.

We doubtless agree that the present President is a reckless fool when it comes to fiscal matters, but there's where it ends.

[2shoes]

Why are only American examples used?

[Tacitus]

It's been some time since the Republicans were elected to lead any other country, 2shoes.

[double-plus-ungood]

It's been some time since the Republicans were elected to lead any other country, 2shoes.

Canada, for example, almost never elects Republicans.

Then again, even our Conservative Party of Canada is somewhat to the left of the Democrats.

[2shoes]

Right. Thanks.

Is this an American-only blog, or can discussions about political parties in power being fiscally responsible be extended to, you know, the rest of the world? Remember us? I know the Empire is much more exciting and glam, but things do happen out on the frontiers that some find interesting.

[Edward]

In a recent comment, Edward wrote: "What we're learning is that the only party in favor of fiscal responsibility is the party out of power." With respect, this is not true.

I happily stand corrected.

[hilzoy]

Edward: it's so rare that I disagree with you that I had to pounce on the opportunity.

Tacitus: surveying the data, it's hard to see a big break between 1994 and 1995, or 2002 and 2003, or any other date when the party controlling one or both houses of Congress changed hands. By contrast, the differences when one party takes over the Presidency are obvious.

[Andrew Reeves]

The graph on deficits seems to map more closely onto tax policy and recessions than anything else. Note, that the Kemp-Roth tax cuts and 82 recession cause a plunge in government revenues. Subsequent tax increases in 83 and 86 coupled with economic growth cause deficits to shrink until the 1990-91 recession hits, when they balloon again. You then have Clinton's tax increase and economic recovery causing growth. Followed by the Bush tax cuts and a recession.

In other words, bickering over where excess can be trimmed is pointless when tax rates are simply too low for everything the government's trying to do.

[Francis]

The argument about Congress's power would have much more strength if there were citation to facts demonstrating that there have been gross differences between the budgets submitted to Congress and those approved.

If, as i believe is the case, Congress largely follows the President's lead, Tacitus's attempt to shift / spread responsibility fails.

[CaseyL]

Bush isn't a fool.

Nor are the GOP leaders in Congress.

They know exactly what they're doing: redistributing wealth upwards. All of it.

They're not fools. Their intent was always to strip the country of as many of its assets as they could and pocket the take.

[CaseyL]

Bush isn't a fool.

Nor are the GOP leaders in Congress.

They know exactly what they're doing: redistributing wealth upwards. All of it.

They don't "believe" in the government, in its function as a social construct for the general welfare, as a regulator of commerce in any way, or even in terms of the national defense. They loathe it as something that gets in the way of the "right people" acquiring wealth and power.

So they're stripping our government, and our country, of its assets - our assets - and pocketing the take.

They're not fools. They know what they're doing, and they're doing it deliberately.

[CaseyL]

@$(*%!! double post.

Sorry.

[Tacitus]

Is this an American-only blog[?]

Who cares? It's an American-only post. What a dumb thing to carp about.

On topic, no one's asserting that the President doesn't play a major role in budget-making. But to dismiss the role of Congress wholesale like this is simply ridiculous.

Guess it's tactically useful to ignore the actual mechanisms of American governance, though.

[Nell]

In other words, bickering over where excess can be trimmed is pointless when tax rates are simply too low for everything the government's trying to do.

Thanks, Andrew, for getting to the heart of it succinctly.

[2shoes]

Who cares? It's an American-only post. What a dumb thing to carp about.

And here I thought this post was in response to "What we're learning is that the only party in favor of fiscal responsibility is the party out of power."

I wasn't aware of the implied restrictions. My mistake.

Can I call things Tacitus says "dumb" too? Or does only he have that privilege?

[hilzoy]

Tacitus: in this case, I think: the actions of the President and Congress are not independent of one another. This means that I can't just e.g. look at Presidents' proposed budgets, since they are presumably opening bids designed in such a way that Congress will be as likely as possible to produce the budget the President wants; nor can I just look at the budgets Congress produces, since presumably they have some knowledge of what the President will veto and what he won't, and have acted accordingly.

Therefore, I adopt the empirical method, and ask myself: which changes best explain the data before me? (I, too, took biostat, after all.) As I noted earlier, the answer does not seem to me to be: changes in the party controlling Congress. Please feel free to show me where I'm wrong.

[Dantheman]

Let's go a bit further into Tacitus's arguments re: Congress's role in the budgets. During the period 1981-86, there was a Republican President and Senate and a Democratic House (though it included a large number of Southerners who eventually switched parties to become Republicans, such as Phil Gramm). That was also the period when the deficit skyrocketed. Once the Democrats regained control of the Senate in the 1986 elections, the deficit was greatly reduced.

Coincidence? I think not.

[Barry]

Tacitus : "Guess it's tactically useful to ignore the actual mechanisms of American governance, though."

You raised the point, Josh, and it was dealt with in two following comments. You didn't bring anything more to the table.

[Tacitus]

Barry, let's not labor under the impression that minds are apt to be changed here, of all places; nor that it's worth doing the research necessary for persons of more ordinary sincerity.

I wasn't aware of the implied restrictions.

Okay, now that's dumb.

Dantheman should familiarize himself with the US Constitution, specifically I.7.1.

[DaveL]

Tacitus, minds are sometimes changed here. Your efforts to turn every thread in which you participate into a snarkfest don't contribute a lot to that process. Perhaps it would be more useful for you to respond to the substance of Hilzoy's argument and keep your thoughts about her motives to yourself.

[Tacitus]

Come now, DaveL -- let's not make it about me. Again.

[Dantheman]

Tacitus,

"Dantheman should familiarize himself with the US Constitution, specifically I.7.1."

I am familiar with the provision that revenue bills originate in the House, but that the Senate can amend them. So what? Since the House only changed hands once over the last 60+ years, control of the House does remarkably little to explain the varience in fiscal discipline. Perhaps instead of mere snark, you would like to propose an alternate theory?

[Dantheman]

Sorry 50+ years, not 60+.

[Tacitus]

There's no need to propose an "alternate theory" when there's no coherent theory being advanced in the first place. We are to accept an argument premised upon the following things being de facto equal from c.1960 to now: history, circumstance, context, every United States Congress of the given period, party identity, and ideological self-identification. We are further to accept that the primary meaningful variable in American governance is the partisan affiliation of the President. We are further to accept that the Constitutional mechanisms of government (American government, 2shoes) are de facto irrelevant. We are further to accept that past behavior as posited is a predictor of future results.

Against all this, I am asked to "propose an alternate theory." It is a request with all the qualities of a demand that I disprove the Frog God's causation of the rains.

[Dantheman]

"There's no need to propose an "alternate theory" when there's no coherent theory being advanced in the first place."

Almost funny, but not quite. A theory has been proposed by hilzoy. You dispute it, broadly hinting, but never explicitly saying that Congress has a larger role in fiscal discipline. hilzoy and I respond to that argument, and when all else fails, you invoke Frog Gods. I guess when your party's record is that bad, that's all you have left.

[DaveL]

Tacitus, it will be much easier not to make threads about you when you can manage to visit this place without pissing all over the furniture. The first paragraph of your last post contains many of the elements of a coherent critique of Hilzoy's post, one with which I'd probably agree to a considerable extent. But you have to spoil it by wrapping it in gratuitous nastiness. Why? You're not stupid, and while I'm not wild about your rhetorical flourishes, you can be a pretty good writer. Why not drop the animosity and participate in a civilized conversation?

[Tacitus]

Yes, the Frog God was the totality of my post above. Thanks for reinforcing my point to Barry.

Oh, ObWi.

[Tacitus]

This conversation again. Short version, DaveL: this site gets as it gives. Now, back to the regularly scheduled thread.

[Delicious Pundit]

To be fair, Clinton proposed a big health-care program which would have meant more spending, although at around the same time he also, IIRC, proposed his BTU tax which might have balanced the spending. (Said BTU tax now seems like a good idea to those among us of conservative temperments, since nothing threatens to change our lives more radically than this global warming thingy.)

[ken]

The thing that controlls spending is taxes. Taxes are the only mechinism we have to determine if we are spending money wisely or not.

If the party/idealogy in power is willing to tax the public to pay for its spending then that party will be fiscally responsible. Hilzoy demonstrated that facts support this.

It is just plain common sense that the party/idealogy that consistently calls for tax cuts is not going to care about spending cuts. Not while the US Treasury remains the benchmark for risk free investing and can borrow money at their will.

When elected they know that their is an ignorant part of the population that believe that 'Reagan proved that deficits don't matter' and further, that for their big supporters it is 'pigs at the trough' time. Yee-haw.

What I really don't understrand is why people like Tacitus or Charles or Sebastian who, presumably are not among the ruling elite and may have children of their own, would support a party that has such contempt for such basic American values as prudence and thrift.

[Raven]

The question raised by Tacitus about the responsibility of Congress vs. the responsibility of the president is certainly a good one. But I would submit that it has pretty much been answered.

Dwight Meredith of wampum, formerly of PLA, has addressed the hypothesis here
that the budget deficit is mainly of the presidents making, and he comes to the same conclusion as hilzoy.

He leaves open whether the budget is mainly the president's or the congress' responsibility, but later links to Brad DeLong, who says

The overwhelming proportion of the deficits of the last decade [i.e., the 1980s] were already proposed in President Reagan's and President Bush's original budget submission. There was no explosion of federal spending over and above what the presidents had asked for. More than four-fifths of the 1980s deficits were "presidential." Less than one-fifth were "congressional."

I think this would pretty much settle the issue, and anyone who disagrees with the hypothesis that it is mainly the president with his budget proposal who is responsible for a deficit should come up with something that is a bit more fleshed out than generalities about the fact that of course the budget is decided in some kind of back-and-forth between the president and congress.

[Barry]

Josh:
"Yes, the Frog God was the totality of my post above. Thanks for reinforcing my point to Barry."

Meaningful semantic content: 0.00% Snark content: [no reading, the meter melted]

Josh: "This conversation again. Short version, DaveL: this site gets as it gives. Now, back to the regularly scheduled thread."

Demonstrably false, since Josh's initial objection was quickly answered by two comments. Hilzoy's original post, and those comments, made and supported arguments. Josh's contribution has been snark, irrelevancy and one relevancy which had already been dealt with by those two comments.

So the current giving of Obsidian wings on this thread, consist of an argument with evidence, and further coments dealing with a not unreasonable objection. Josh's controbution has been snark, irrelevancy and one relevancy which had already been dealt with.

That's not Obsidian Wings giving as it gets, Josh.

[Dantheman]

Barry,

Tacitus has said in so many words that contributing any substance to this site is a waste of his time, as our minds are closed to actual argument. This explains why he does not feel the need to cite any facts in support of his positions, but raises the question of why he comes here at all. Off the top of my head, I can only come up with:

1. sufficient boredom that it is worth spending time and effort mocking us.

2. the same desire which impels me to occasionally visit the zoo and feed the elephants.

3. one of us is secretly a wizard from Harry Potter's universe and has placed upon him the Imperius curse.

I am sure he will return to advise which is correct.

[CaseyL]

He adds no value to the conversation, and gets some cheap jollies out of derailing a thread to be "all about [him]."

Why not just ignore him?

[BSR]

Tacitus is easy to understand. His ideas are so intellectualy and moraly bankrupt he cannot defend them anywhere but in a pathetic echo chamber like tacitus.org or redstate. So he'll come in here and call anyone that disagrees with him dumb, or some other insult.

And to make it perfect he'll return every month or so to whine about how this site is just full of hatefull lefties that only know how to insult. The irony would be entertaining if it wasn't pathetic.

[Kyle Hasselbacher]

this site gets as it gives

My victims are responsible for my behavior.

But he hit me first.

Now look what you made me doo.

["Doo" was a typo that was too good to correct.]

IHBT

[Charles Bird]

Hil, Newt and the 1995 Congress pressed Clinton to sign a bill to balance the budget in five years. In the absence of this, Clinton's budgets had deficits with no end in sight. Clinton fought and resisted (later agreeing to ten years), but he eventually acceded to a seven year plan (or was it five? can't recall now). Of course, he afterwards tried to take all the credit for this fiscal prudence. Clinton was also fortuitous at being beneficiary of the peace dividend. Look at defense spending in 1990 and 2000.

[Barry]

That's interesting, Charles, because (from the graph above) that the deficit was clearly trending to improvement well before Newt & Co took Congress. It seems that a Democratic President and Congress did a pretty good job, in the short time that they had.

The effects of Republican Congressional Virtue are nowhere to be seen there in this graph, or later, once GW took office, and we entered the Age of Responsible Adults Restoring Honor and Dignity to the White House.

[Charles Bird]

That's interesting, Charles, because (from the graph above) that the deficit was clearly trending to improvement well before Newt & Co took Congress.

Like I wrote, there was that little peace dividend, not to mention the S&L bailout that was pretty much taken care of before Clinton came to office.

[hilzoy]

Also, Clinton raised taxes, iirc.

[rilkefan]

Re the S&L bailout, is that something I can blame on Republican fire-the-regulatorsism, or was that the Democratic Congress's fault?

[Dantheman]

"Also, Clinton raised taxes, iirc."

And the taxes were the biggest component of the change. Using the percentage of GDP figures in the historical site Charles referenced in his post, of the 1.7% of GDP change to the deficit from FY 1993 to 1995 (i.e. before the first budget after the Republicans took over Congress), 1.0% was increased revenue, and .1% was increased Social Security Trust fund.

[cleek]

one of us is secretly a wizard from Harry Potter's universe and has placed upon him the Imperius curse.

imperious ?

[CharleyCarp]

It seems to me that anyone serious about this would have to say that divided government is the best way to fiscal responsibility. Both parties restrain the impulse to curry favor with constuencies. Each can maneuver to blame to other for cuts (or tax increases) while finding a way to take credit for what's good.

The current configuration completely lacks this. In our system, unlike our friends in parliamentary countries, the opposing poles of power are the government institutions, not the parties. In many configurations, institutional position is much more important than party -- many congressional Dems were now more helpful to carter than they were to Ford, and the leadership was more than a little unfriendly to Clinton when he came to town. Maybe it's because Dems believe in government, and take 'running against Washington' personally.

If we had a divergence of interests between Mr. rove and Mr. Delay perhaps we'd see something remotely like responsibility here. Alas, perfect alignment, and so neither acts as a restraint of any kind on the other.

I personally like the Clinton 95-01 configuration better than the Bush I configuration -- Reps in Congress, Dem executive -- because Reps have better party discipline, and don't get rolled nearly as easily.

(I saw my favorite congressman ever, Pat Williams, in 2000, and asked him when we'd regain control of the House. He said even if the party got control, Southern Dems would still align with the Reps, and so it would be no better than having a blocking position. With Caesar in the WH, though, that blocking position looks pretty good . . .)

[Dantheman]

cleek,

I will check the spelling tonight, but I am pretty sure I am right. The party under the curse must follow the instructions of the party performing the curse. It's one of the 3 unforgivable curses in Harry Potter's world.

[rilkefan]

"It's one of the 3 unforgivable curses"

So turning somebody into a newt or some ugly shrubbery is forgivable?

[Dantheman]

Yes. Only killing someone (Avada Kedavra), torturing (Cruciatus) and controlling people (Imperius) are the 3 unforgivable curses in that world.

Turning someone into a newt is not merely forgivable, it's taught in class.

[cleek]

but I am pretty sure I am right

you are. but i was making a pun... or maybe you were too.

[dmbeaster]

Hil, Newt and the 1995 Congress pressed Clinton to sign a bill to balance the budget in five years. In the absence of this, Clinton's budgets had deficits with no end in sight.

This is just revisionist history from the CATO institute, and based on drivel.

The numbers clearly show that the tax increase in 1993 was the single largest contributor to balancing the budget. That would have been impossible after 1994 (as it was, it only passed by one vote without Republican support), so sorry, Newt gets no credit.

The 1995 budget fight was about where money was going to be spent -- not about whether or not to balance the budget. It was not a fight with Clinton proposing overall higher spending and Newt less -- it was about where to spend the limited amounts of money.

As for the proclivities of a Republican Congress to spend or be thrifty, the last four years prove beyond a doubt that they prefer vast amounts of new spending over prudence. The evidence is that they were restrained by Clinton until 2001, when with Bush in power all restraint was lifted, and the huge spending increases were unleashed.

Or has the Republican Congress recently been taken over by pod people, and that explains their spendthrift ways?

[Noumenon]

As a new reader, I'm really surprised at the way Tacitus behaves here compared to his own blog. I've liked his style over there for a couple years, but over here it's very flamey. I guess he holds himself back in order to persuade when he thinks he can.

[hilzoy]

Noumenon: it's so rare that ding an sich manifests itself here in the phenomenal world that I just had to say: welcome! If you can bring yourself to submit to space, time, and the categories (which I know you can't, at least not without appearing as a phenomenal object), do show yourself again. ;)

[Anarch]

Oh lord. Someone take the schnapps away from hilzoy before she philosophizes again...

[Noumenon]

heh heh, someone who gets my handle. I'm the real thing, baby!

[hilzoy]

Noumenon: so are we all ;)