Does the Economy do better under Democrats or Republicans?

It was very frustrating to read the news about the impending fiscal cliff, the negotiations and have so much rhetoric and so little facts. Nobody, it seems, is interested in figuring out what the 'real' problem is and then going about fixing it. Politicians are doing what they do best, spinning information in a way that suits them, the media is doing what it does best presenting the news in a way that will attract more viewers/readers rather than in a 'boring' but factual manner.

I suspect there is a way to present news in a factual manner and get more readers/viewers, but few news outlets have figured out a way to do this consistently. And we the public are also to blame, we 'say' we want facts and answers, but we end up going to MSNBC if we are liberals, Fox news if we are conservatives and CNN if we are independents (mostly moderate conservatives and liberals that find their party has shifted too far right or left for their tastes). So we say one thing, but really what we want is the media to confirm our views, not challenge them so we drift towards the news outlets that do and away from those that don't.

My frustration comes from the fact that this morning I spent quite a bit of time looking for a direct comparison of the plans offered by the two sides, with an objective look at the pros and cons of each, and am still looking. It was however very easy to find articles short in substance, but high on partisan rhetoric. Thus I did what comes naturally when I get frustrated with or suspicious of the information I am getting from the media... I go look for data. At first I had some fun looking at current and projected spending for various government programs vs the projected deficits.. I am not sure I believe the projections for the deficit, but I found the information interesting so here it is (USgovermentspending.com)

In the above graph we are looking at spending (in Billions) for each government program.  When we talk about cuts it makes sense to cut from the programs that will give us more bang for the buck, for example if you cut 1% from a program that gets more money, you are going to get more money back, than if you cut a program that gets substantially less money.  What we tend to do is cut programs that are unpopular rather than programs that could actually survive the cuts a little better. 

In the above scenario, cutting 1% from defense or healthcare, would give you more money back than the entire budget for education.  Do you remember the war on welfare mothers?  Contrary to popular belief welfare is not one of the most expensive programs.   Many were so angry with welfare mothers that there was a strong sentiment to dramatically cut spending to welfare programs.  Well sometimes emotion leads us astray as if you look at the amount spent on those programs specifically directed to families with kids, we see that it is it s tiny component of the budget.

 And while it is true that spending for that program has gone up under Obama, it is hardly the cause of the increased budget.  In addition to that, overall spending on welfare, after initially going up is actually going down now under president Obama.  That increase in spending is arguably necessary during a recession when more people will be needing services provided under those programs (these programs also service the disabled, and veterans).

As a Liberal I tend not to like seeing cuts in pensions, or healthcare but I think that unfortunately, because these look like they will become increasing burdens on the government, that is an area that will have to be looked at for cuts (see below), in addtion to cuts in defense.  I suspect that many of those cuts can come from providers rather than beneficiaries (who are economic drivers, like everyone else, if they can't provide for themselves, they will end up costing the government in other areas such as welfare and healthcare).  Also, and this is another opinion not yet backed up in fact, that healthcare in the US is more expensive than anywhere else, while not necessarily providing better care other than at emergency or highly specialized care.  If we could address this, I think healthcare costs would come down, without decreasing access of people to care, or causing them to go ban

In the above pie chart is the spending as a percent of GDP on various government programs and below is the projected spending in 2017.  Notice how small a percentage education is, so remember than when you get mad about how teachers can't teach and want to cut the education budget!

Finally a look at the deficit over time.  I was curious to see how the deficit changed over time and also how it changed depending on the president and their party affiliation.  There seems to be a general idea that spending and deficits go up under democratic presidents and then go down under republican presidents.

If the above projections and spending is accurate (source for the data used for the following charts: PresidentalDebt.org)
Then the Deficit as a percent of GDP was actually higher when Obama took office than it is now, and it has been dropping.  This is different from actual amount, as the actual amount has been going up, but so has revenue.  Below is a graph looking at deficit as a percent of GDP, by president.  It is interesting to note that the deficit has gone down with every Democratic president except for Obama, and up with every Republican president, yet not as much by Bush than other recent republican presidents until the end of his term.

 So the above graph should make both Liberals and Conservatives happy, liberals can say that republicans tend to drive up the deficit over time, and most Democratic Presidents tend to reduce them, and Conservatives can say that they were right about Obama, he is an out of control spender. 

Not so fast for either side :).  In the graph below is the percent increase of national debt under each administration.  I have to admit I was surprised to see that for all republican presidents, while there was an increase in debt growth during their administrations, they also started to reduce the growth before they left office.  The difference with Democrats is that they tend not to increase the rate of growth of the total debt during their administrations and this is true for all of them from Carter onwards.  This would include Obama, who has drastically decreased the growth rate of the debt, down to below levels of President Bush's first term.  So again Both sides can take some comfort in the data below.

So when you put the it all together what does it look like?  It looks more complicated than at first glance.  The deficits tend to increase during republican administrations overall because even though the rate of spending increase, decreases, there is still an increase in the national debt over time.  While during Democratic administrations there is either a drop in deficits (Clinton era) or at the very least not an increase (Carter and Obama eras).  A positive note for republicans is that Bush actually, until his last year, did not increase the deficit that much, however the recession caused him to increase spending, and delayed the ability of President Obama to do the democrat thing, and to reduce the increase of deficits.

So the data is not as warm and fuzzy to either side as we would like, but it is reality of a sorts and rather bipartisan in blame and praise for handling the economy.  I am not sure why there is a perception that Democratic administrations are spend crazy, it is clearly not true.  I suspect it has to do with the increase in spending for social programs that tends to occur when they come into power.  However as seen above, that kind of spending is a very small piece of the pie.