De-heroification … dispelling some Reagan myths

February 15, 2011 | By | 7 Replies More

Now that the hoopla of February’s first weekend has faded, let’s hope the deification process fades as well. It must have been such a downer for the Reaganites and their 100th birthday celebrations to have to compete with the NFL and the most watched Super Bowl ever…the gall to schedule such an event on the holiest of days! Amidst all the reminiscing and nostalgia, I did happen to see a few articles not as admiring, such as Michael Kinsley’s on Slate.  I like this part:

In the economic sphere (discussed in last week’s column), the Reagan hagiographers give him credit for things he intended that never happened, such as smaller government. On the world stage, they credit him for things he never intended that did happen.

I’m not going to get into the myriad of philosophical elements of Reagan’s legacy on what he did and didn’t do and what gets attributed correctly or not. I don’t have the time, or the inclination, and there are a host of Gipper love books and a couple like Will Bunch’s Tear Down This Myth: How the Reagan Legacy Has Distorted Our Politics and Haunts Our Future for your reading pleasure.

It’s human nature to see things from one’s too often myopic viewpoint and human nature to remember things they way we want, to the point of manufacturing memories that just aren’t true. Such is the case with Reagan and that nostalgia. Longing for the days that never were. And the political right and its Murdoch media arm are very good at enhancing the myth that is the goal of the Reagan Legacy Project, “recalling” those good old days of Reagan.

Truth or not, there are several topics that are now commonly tied to Reagan’s legacy; myths of smaller government, lower taxes, less spending. And most people have no idea how much the debt and deficit grew under Reagan.

The military has a nice term known as BLUF – which stands for Bottom Line Up Front. This is going to get tedious, so I’ll cut to the chase:

In raw numbers not adjusted for inflation, Reagan increased federal spending by $466B (69%) over what he inherited, averaged a %177B deficit (+180%), added $1.40 trillion to the debt (+178%), enjoyed a pretty substantial increase in the GDP (+77%), but increased the debt to GDP ratio by 15%.

Even adjusted to a FY2005 baseline to account for inflation, Reagan still increased federal spending by 22%, averaged a deficit that was 99% more than Carter’s average, increased the public debt by 100%, and as the adjusted GDP increase was only 28%, that 15% increase in debt to GDP was a lot more substantial.

Reagan added 13,000 non-defense federal employees  – the IRS grew despite his wishes. (Clinton decreased the non-defense federal workforce by 99,000.)

I’ll deal with each piece individually, but that’s it in a nutshell. If you want to know more and how I determined this, read on…

I actually started on this last summer, but set it aside to study for an exam I had been putting off for 13 years or so. I found myself broadening the scope of my investigation and not having enough data to complete the task. I wanted to look at the numbers of the debt, deficit, budget under the presidents since Carter. Digging into the puzzle, I soon wanted to map the parties in office next to the makeup of the congresses, because it would also confirm or deny my contention that the Republicans are far less fiscally responsible than the Democrats (though both need a lesson in right-sizing the government). DI has had a number of posts on such fiscal myths, one recently by Tim Hogan titled “Republicans are not fiscal conservatives” – you’ll see that is very true.

So on to the myth dispelling. A couple of notes to start:

1) I used the Budget of the United States Government as my primary source. Not easy, and anyone who truly knows everything in there must be insane in his/her private life. Also pulled data from the Monthly Treasury Statement. and the Bureau of Labor Statistics.

2) When I left off last year, the numbers I pulled from the budgets were normalized to the FY2000 baseline. I downloaded the FY12 submission to fill in the last years of W. Bush and saw that the baseline was now FY2005, so I had to go back and recalc all the inflation factors so that apples could again be compared to apples. Inflation has obviously played a huge part in our economy and can’t be ignored. So I ran the numbers for both raw and adjusted comparison.

3) I had to jog my memory because I couldn’t remember where I got some of my data, and I didn’t document them before I set the project aside. Googling turned up something I hadn’t seen before – a pretty good summary done in six parts by Dwight Meredith titled Just for the Record for his blog Politics, Law and Autism in 2002. You can find all of them in one place here with links to the original posts on Meredith’s P.L.A. blog. I’ll summarize his excellent summaries below, but I had to fill in the gap from 2002 to now to complete the picture of comparing Republicans and Democrats on the matters Meridith addressed. This was a side project paralleling the Reagan focus.

4) I’m just using numbers to dispel the myths, because they are publicly available to confirm and are mostly static. But they can change. I discovered that when triple checking my spreadsheet against the different budgets I found on the OMB site. Even the spending (outlays) for 1994 changed. Which prompts more questions – who is looking at his? and who is tracking stuff that old that is needs to be adjusted? Oh, and the budgets are a joy to decipher. And an interesting reflection of the times. There are now nice sections on winning the war on terror, or roads to recovery. Can’t be without editorial.

5) And, I used the unified budget records for the deficit. Every president since Johnson has used it to hide the true deficit. Clinton ran a “surplus” for four years using this accounting. But, as I said, every president uses it, so if it shows a surplus for Clinton and a deficit for everybody else, imagine how bad things really were/are?

Okay, now, let’s break down some myths. First,Mr. Meredith did a pretty good job compiling his stats. I encourage you to check out all six parts, but I will summarize his conclusions here on the differences between Republican and Democrat administrations. I’m blockquoting to set them aside, but they are picked from his six posts (I, II, III, IV, V, VI) and not really one single quote (and the bold emphasis is mine.) I’ll get into Reagan specifics after. I may or may not complete the lists with the W. Bush years, but not now for sure.

In twenty years of budgets prepared by Republican presidents increased the national debt by $3.8 trillion. The average yearly deficit under Republican budgets was $190 billion, the average rate of GDP growth was 2.94%, the unemployment rate averaged 6.75% the inflation rate averaged 4.96%, the average percentage growth of total Federal spending was 7.57%, and the average growth rate of Federal non-defense spending was 10.08%. Under the 20 years of Republican administrations the number of non-defense government employees rose by 310,000.

The twenty years of budgets prepared by Democratic presidents increased the national debt by $719.5 billion. The average yearly deficit under Democratic budgets was $36 billion, the average rate of GDP growth was 3.92%, the unemployment rate averaged 5.1%, the inflation rate averaged 4.26%, the average percentage growth of total Federal spending was 6.96%, and the average growth rate of Federal non-defense spending was 8.34%. Under the 20 years of Democratic administrations, the number of non-defense government employees rose by 59,000.

Of the 369,000 employees added between 1962 and 2001, 84% were added under Republican administrations and 16% were added under Democratic administrations.

Kevin Drum of CalPundit (link now broken) has looked at economic growth by party of the President for the period from 1948 through 2001. He used “lag times” of 3, 4 and 5 years in assigning responsibility for economic performance to a President. In each case, economic growth was higher in Democratic administrations than in Republican administrations, unemployment was lower in Democratic than in Republican administrations, inflation rate was lower in Democratic than in Republican administrations.

So Meredith looked at budget deficits, number of non-defense federal employees, GDP growth, unemployment, inflation and growth in federal spending for each of the administrations of Kennedy to Clinton. My own analysis laid the terms of the presidencies over the fiscal year budgets submitted, a cruder correction than the lag times of Drum, but it was consistent. Last time I was only concerned with Reagan; this go around, I went back to 1950.

Here’s a chart of federal spending overlapped with the party of the president. Yes, the Congresses mattered, but as I noted above, that’s for another day though I do have a note at the bottom on budgets since 1996. The Executive drafts the budget anyway – Congress just tweaks it.

And here is the public debt also mapped against the presidential parties:

Yes, that dip came during Clinton’s second term. Immediately reversed with Bush’s first budget.

Now, let’s look at the spending of Reagan, Bush, Clinton and Bush:

Federal Spending (Budget Table 1.1)

Reagan Bush I Clinton Bush II
Increased $466B Incr. $266B Incr. $453B Incr. $1.66T
+69% +23% +32% +89%

Inflation adjusted to FY05 $$

Incr. $309B Incr. $122B Incr. $226B Incr. $1.1T
+22% +7% +12% +53%

Notice the Bush tandem, particularly #2 (and the GWOT* was hidden from the budget until Obama took office), but Reagan spent record amounts until W.

Federal Deficit (Table 1.1)
Reagan Bush I Clinton Bush II
Avg’d $177B Avg’d $259B Avg’d. $8B surplus Avg’d $444B
+180% over predecessor +46% -103% +5,916%

Inflation adjusted to FY05 $$

Avg. $300B Avg. $356B Avg. $2B surplus Avg. $425B
+99% +18% +12% +22557%

Reagan’s first budget had a deficit nearly double that of Carter’s last budget and that was just the beginning. W. Bush is the all time king, though.

Federal Public Debt (Budget Table 7.1)

Reagan Bush I Clinton Bush II
Increased $1.40T Incr. $1.06T Incr. $71B Incr. $4.23T
+178% +48% +2% +127%

Inflation adjusted to FY05 $$

Incr. $1.66T Incr. $950B Decr. $560B Incr. $3.11T
+100% +29% -13% +84%

Reagan added a huge amount to the public debt. H.W. Bush nearly matched it in half the time. Clinton actually paid down the public debt (the adjusted gross debt did increase) over his last four budgets. W. Bush tripled Reagan (double the inflation adjusted amount) but Reagan tops the percentage increases both in raw and adjusted fiscal irresponsibility.

I’ve got more tables and charts on the GDP and spending vs GDP, but the last one for here is the public debt to GDP ratio:

Debt to GDP ratio (Calculated including Table 1.2)

Reagan Bush I Clinton Bush II

Inherited 26%

41% 49% 32%
Left 41% 49% 32% 54%
+15% +8% -17% +18%

You can see dear Mr. Reagan spent and spent against that prosperity.

Also of note because Meredith looked at it, unemployment under Reagan averaged 7.3%; Clinton saw 5.6%.

Final chart for the class as companion to that last table…we were on a good trend until Reagan took office. Clinton got it going in the right direction again until George W. Bush spiked it again. Yep. Fiscal responsibility.

Bottom line: Reagan was no hero on the economic front and there’s a good argument for him starting this mess. And I didn’t even get into his tax increases.

One final note for the wonks: I haven’t found submitted budgets for years prior to 1996 to compare to approved budgets, but for the first four of those six Clinton budgets, a hostile Congress cut his submitted budgets (raw numbers – I’m not getting into how they internals were scrambled). The Republicans increased Bush’s first five budgets, then the 2007 Democrats cut it. The next two were increased but Bush’s last one was increased in Obama’s first year by direction to reflect the Global War on Terror (*GWOT). And the Democrat controlled Congress cut both of Obama’s first two budgets.

So much for that mythical Republican fiscal responsibility. And one part of the mythical Reagan.

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Category: Economy, History, Politics, Propaganda

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Jim is a husband of more than 27 years, father of four home-schooled sons (26, 23, 16 and 14), engineer delighting in virtually all things technical, with more than a passing interest in history, religions, arts, most sciences (particularly physics) and skepticism.

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  1. Reminder: National Debt 1980-2010 « Talkandpolitics. | April 9, 2011
  1. Jim,

    So much for my light morning reading. 🙂 Though I haven't had time to digest the details, I'm grateful for your work. Thank you. What churns "underneath" this study is the likely legacy conversations that will be part of the 2012 posturing that have begun in earnest this past month. The "high road to Reaganism" is one that both parties aspire to make their own without diminishing their own view of the future. With apologies to math, if numbers like yours can be used to have meaningful conversations with voters that Reagan was not your "standard deviation" away from the myth that outfoxes the truth, your work does a great service.

  2. Brynn Jacobs says:

    Jim-

    Great post. I couldn't help but think of it as I read the news this morning that the debt-to-GDP ratio is set to go over 100% this year.

    Mr. Obama‘s budget projects that 2011 will see the biggest one-year debt jump in history, or nearly $2 trillion, to reach $15.476 trillion by Sept. 30, the end of the fiscal year. That would be 102.6 percent of GDP — the first time since World War II that dubious figure has been reached.

    I admire your determination to deal with these statistics. I'm often frustrated that the government does not publish statistics like these in a more standardized and accessible format for those of us interested in such things.

    edit: Bloomberg has the bad news about this escalating debt. Debt service payments are set to jump, big time:

    Interest expense will rise to 3.1 percent of gross domestic product by 2016, from 1.3 percent in 2010 with the government forecast to run cumulative deficits of more than $4 trillion through the end of 2015….

    Net interest expense will triple to an all-time high of $554 billion in 2015 from $185 billion in 2010, according to the Obama administration’s adjusted 2011 budget.

    “It’s a slow train wreck coming and we all know it’s going to happen,” said Bret Barker, an interest-rate analyst at Los Angeles-based TCW Group Inc., which manages about $115 billion in assets. “It’s just a question of whether we want to deal with it. There are huge structural changes that have to go on with this economy.”

    The amount of marketable U.S. government debt outstanding has risen to $8.96 trillion from $5.8 trillion at the end of 2008, according to the Treasury Department. Debt-service costs will climb to 82 percent of the $757 billion shortfall projected for 2016 from about 12 percent in last year’s deficit, according to the budget projections.

  3. There are several presidents whose mythologies should be tackled in so meaningful a way. One of my bug-bears is Andrew Jackson, who is virtually up there with Washington in the pantheon of holy presidents—yet he virtually destroyed the economy in his war with the United States Bank, oversaw the massive migrations known as the Trail of Tears, and generally has a reputation based on an apparent "toughness" that is somehow seen as more important than responsible government.

    Grant on the other hand gets pasted as one of the more wasteful of presidents because of his tenure during Reconstruction, but when you look at the numbers he comes up average on spending increases and "graft."

    Reagan has his reputation based on two things—image and the collapse of the Soviet Union. He was in most other respects a mediocre president, another one who "didn't do nuance." He spoke to an Americanism that likely never existed outside of MGM and Republic Pictures movies and people bought it. He had the good fortune to be running against perceived losers and morons. (Sorry for any fans of Mondale, but he was dull, a bit shortsighted, and just didn't have a very well run campaign.)

    For the eight years of his presidency, Reagan "looked" like a president and acted like one on tv. People who supported him loved him because he made them feel proud to be Americans. Somehow.

    He has much to answer for for bringing evangelical christians into the political fray the way he did and turning politics over to screeching religion-driven grandstanders. His treatment of gays in the first years of the AIDS crisis is unforgivable. The bout of deregulation he oversaw has crippled us to this day. His firing of the air traffic controllers rather than address their legitimate concerns was the action of a Henry Ford siccing the Army on strikers and could very well have cost us tremendously.

    I believe he is the Ground Zero of the Republican notion that in order to reduce government we have to spend it into bankruptcy, a policy which W. made great strides in.

  4. Jim Razinha says:

    Right there with you on Jackson. I wanted to campaign to get Jackson removed from the $20 bill and to de-hero him for his atrocities, but my experience with Congressional correspondence taught me it would go nowhere fast. In 2007, I sent an online message to my then-new-to-me Rep. here in Texas about needing to investigate the rising gas prices (for no apparent reason other than those futures traders were driving them up) and got a nice, polite response thanking me for my concern over illegal immigration.

  5. Tim Hogan says:

    Thanks Jim, there are trends which I could make refrences to but, the hard numbers you provide show Reagan for what he was; no fiscal conservative. I won't even get started about his quisling, cowardly cut and run from Lebanon after the Marine barracks were bombed that started off decades of suicide bombings as a terror tactic.

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