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Comparing the Presidents: 2012 Election Edition

There's been a lot of talk lately about the performance of various presidents (starting with Reagan) on a number of metrics. Not satisfied to take someone else's word for it, I decided to look up the numbers for myself.

Unemployment.

One thing about this chart that pops out at me is that while Obama inherited a pretty bad situation that peaked during his first year, things have been getting better. Now look at the red Reagan line - things were pretty good during his first year, but got pretty bad during his 2nd and 3rd years, getting better in his 4th year on.

A lot of people have been comparing Obama to Regan, but by these numers, at this point in Reagan's presidency, it's not clear which president is doing better.

During Bush Sr.'s only term, things got progressively worse, especially towards the end so that Clinton inherited a situation similar to Reagan's, but things only got better during Clinton's presidency.

Bush Jr. inherited a very good situation from Clinton, and things got moderately worse before steadily improving, up until the last couple of years as the financial crisis picked up steam, which bring us into the Obama administration where unemployment peaked, but is slowly improving.

Median Household Income

Median houehold income increased year-on-year during Reagan's first term, but dropped during his second term, up until the Clinton era, where they rose and stayed pretty high. Under Bush Jr's administration they sank pretty steadily to where they are today, under the Obama administration, where they will hopefully make a turnaround and start rising again in the next 4 years (whoever is elected).

Inflation

% Change in the averge monthly Consumer Price Index year on year.

Inflation under Obama seems comparable to previous presidencies.

Goverment Receipts & Outlays

Below are US Government receipts as a % of GDP (which you can think of as being the tax rate) and outlays.

Here you can clearly see Reagan's and Bush Jr's first term tax cut, Clinton increasing taxes while reducing spending to balance the budget, and Bush's tax cut while increasing spending.

Interestingly, the tax rate is lower under Obama than under any other recent president, but slowly increasing, while spending is higher.

Taxes vs. Unemployment

There's a lot of talk about whether or not lowering taxes affect unemployment.

Based on the data below, there's a -0.58 correlation between government receipts (as % of GDP) and unemployment. In other words, as taxes increase, unemployment decrease and v.v. A higher tax rate seems better for the economy than a lower one, at least using this metric - but it's a chicken vs. egg thing.

Just look at the chart below for the Clinton era - taxes increased almost every year, and unemployment decreased almost every year. Then look at the Bush Jr. era - taxes decreased and unemployment increased. When taxes increased, unemployment went down.

The idea that lowering taxes decreases unemployment is, empirically, incorrect.

Budget Deficit.

Here you can clearly see Clinton's balanced budget, which was inherited by Bush Jr., who subsequently destroyed it.

Obama's first year budget was defined by the financial crisis, the Wall Street bailout (which was begun under Bush Jr's last year in office).

Here you can see that the Republicans almost universally increase the deficit during their first few years in office, reducing it only during their 2nd term (if they get one, Bush Sr. didn't). However the Democrats reduce the deficit every year they're in office.

Budgetary Spending

It's no secret that Republicans love the military. Their love of the military has been summed up very nicely in this manifesto.

Military spending increased every year during both the Reagan & Bush Jr. administrations.

Military spending was reduced nearly every year during the Clinton administration, which, along with raising taxes is how he balanced the budget.

Military spending increased under Obama from his first to second year, and was reduced slightly. White house projections call for a reduction in both military and non-military spending in the next 4 years, if Obama is re-elected.

Conclusions

  1. In terms of unemployment, Reagan's first term was just as bad as Obama's.
  2. Inflation under Obama seems normal.
  3. There's no doubt that there are huge deficits under Obama.
  4. I see no evidence that reducing taxes decreases unemployment.
  5. Military spending is abnormally large under Obama for a Democrat.

Sources


page first created on Monday, October 8, 2012


© Mark Wieczorek