Some facts about budget deficits and the parties responsible

Last Friday, Justin Gardner at The Moderate Voice posted a chart, from Testing.com, showing that the budget deficit had gone up during Republican presidencies and gone down when Democrats held the White House. True enough, but when it comes to the federal budget there are a million and one ways to look at the numbers. Here's an analysis I think is a bit more illustrative of what's really going on. I'll preface my analysis with the comment that the level of increased spending during the past 6 years with a Republican president and a Republican House of Representatives has been far too high.

The power of the purse belongs not to the President but to Congress. To be sure, the President proposes a budget, but it is Congress which appropriates the money, and it is Congress which created the large social programs which have a voracious appetite for our tax dollars. This chart shows which party had control of the House of Representatives and the White House since 1933, and the budget surplus or deficit (of both "on"- and "off-" budget items) run each year, expressed as a percentage of GDP. All raw data is available from the White House Office of Management and Budget (click the image for a larger version).

What this data shows is that, from a purely fiscal standpoint, the best thing for the country is a Democratic president and a Republican House of Representatives. To fully understand the data, however, we'll need to examine who the real culprits behind the spending increases are. Much of the increased spending is a result of pre-programmed expenditures for social programs, over which the President has no control, and over which Congress has no control without substantial changes to the underlying program rules. Increased military spending also plays a significant role. All of this data is available on the OMB web site, and I'll be taking a look at more of it over the upcoming week.

I've previously discussed the connection between GDP growth and federal tax receipts. We must always keep in mind, when debating tax policy, that the important thing is not the tax rate, but the tax revenue the rate brings in.

Incidentally, I use the percentage of GDP figure because it is the most stable way of measuring federal receipts and disbursements. Because of inflation, actual dollar budget figures just keep going up and up and up. Even using "constant dollars", which are adjusted for inflation relative to a base year, shows ever increasing taxing, borrowing, and spending. But since the end of WWII, spending as a percentage of GDP has hovered mainly between 17 and 23% of GDP. Viewing the data this way better shows what really matters, the "bite" the budget is taking out of the total economy of the United States.

UPDATE: I forgot to include a link to Mark Taw, who made the initial post that sparked the Testing.com post which led to the TMV post which I saw. Taw has a lot of good graphs showing federal spending and revenues, examined in a variety of ways.

UPDATE: I also forgot to include links to the House web page on the historical party makeup of each Congress. Similar data is also available here and here.