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Comment by CalChris | Hacker News Reader

In fact, inflation was pretty bad under Nixon (5.8%) and Ford (11.05%) with some up and down. Nixon even instituted price controls in 1970. Carter inherited that economy. He didn't fix it (well, arguably his Fed Chair Paul Volcker did) but he inherited it.

Carter and Reagan were polar opposites. Carter was a fiscal conservative and Reagan was a spendthrift. Reagan was when the deficit floodgates opened. We've repeated this fiscally conservative Democrat followed by spendthrift Republican ever since.

  Carter  $70B deficit
  Reagan  $175B
  Bush    $350B
  Clinton $0B
  Bush    $1.4T
  Obama   $600B

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Those numbers don't really tell the whole truth; federal spending has increased almost monotonically, and the changes in deficit mostly indicate phases of the business cycle when they left. See this chart:https://www.pewresearch.org/fact-tank/2017/04/04/what-does-t...

Clinton for example, left at the peak of the DotCom bubble, and was bouyed by capital gains tax revenue, whereas Bush left during the Great Recession.

Reagan cut taxes (supply side). Clinton increased taxes and cut Cold War era defense spending in his 1993 budget proposal. W didn't even put the Afghanistan and Iraq wars on normal budgeting. That emergency spending went straight to debt. When Obama reversed this accounting trick, he was accused of increasing the deficit. Yes, everything is more complicated.

Senator Daniel Patrick Moynihan's summary of the 1980s: "We borrowed a trillion dollars from foreigners, and threw ourselves a party."

Yep, Reagan, H and W Bush took us from being the largest creditor nation to the largest debtor nation.

And Obama added $10T to that debt, borrowing more than nearly every president before him combined. Cherry picking is a terrible tactic.

Obama inherited W's Great Recession with its 10% unemployment and its cratered tax revenues. This is similar to FDR inheriting Hoover's Great Depression. Obama spent his 8 years digging out of that hole. His one initiative was the ACA which is still intact even after the Republicans had all three branches of government and is quite popular.

Moreover, just as Afghanistan and Iraq were disastrous wars of choice, W's tax cuts, Medicare Part D and his zero down payment home loan programs were the direct cause of that recession.

Obama wasted money on programs like cash for clunkers, failed climate scandals like Solyndra, and engaged in similar "nation-building" as W by sacking the dictator of Libya, which partly led to the rise of ISIS in his second term. It was a complete mess for the middle east and Europe and cost countless lives. Obama and W. were cut from the same cloth and listened to the same bureaucratic Pentagon consensus. There was virtually no difference between the two. That's why they are such good friends, by the way.

Afghanistan and Iraq were disasters and Obama had 8 years to end them but never did.

Cash For Clunkers was a brilliant idea given the economy, the one in free fall that W left Obama. BTW, it was overwhelming opposed by Republicans. That's because McConnell wanted Obama to be a one term president.

Everyone wanted Gadaffi gone, even Putin. Hence the UN resolutions. It was funny that Gingrich was calling for intervention ... until the next day.

Complaining that W and Obama are on good terms? Wow.

Clinton's tax increase cost the Democrats the House in 1994.

Obama clearly did increase the deficit as national debt went from $10T to $19.5T during his tenure. In other words, the debt increased by nearly as much as every president prior to Obama. Of course, we seem to find ourselves on an irreversible debt slope that is rapidly accelerating and I suspect that every future administration will outspend the one prior.

> Obama clearly did increase the deficit as national debt went from $10T to $19.5T during his tenure.

To discuss this without mentioning the Global Financial crisis seems a bit disingenuous. I'm no fan of Obama but this is not a valid criticism, IMO.

Yes, Clinton's budget, his tax increases and defense spending cuts, they did cost the Democrats the House. Gingrich voted against that budget, then campaigned against it, winning the Speakership, then shut the government down over it, twice, and then after it turned a profit, tried/tries to take credit for it.

Obama didn't increase that debt by spending. He did it by inheriting Bush's Great Recession with its sky high unemployment and lack of tax revenues. He managed to decrease the deficit each year until his last. Obama's singular spending initiative, the ACA or Obamacare, is dirt cheap compared to the $6T of the wars in Afghanistan and Iraq. And then there's Medicare Part D.

BTW, the ACA cost the Democrats the House as well. Some things are worth fighting for.

> Clinton for example, left at the peak of the DotCom bubble, and was bouyed by capital gains tax revenue, whereas Bush left during the Great Recession.

Deficit increases under these presidents isn't as much on the business cycle as you indicate. For example, Clinton enjoyed higher capital gains tax revenue, but he also signed legislation to increase taxes (which obviously impact the deficit). Conversely, Bush chose not to include substantial additional revenue in his recession-era emergency spending plans. Both were policy choices that entirely support the OP's point.

In fact, although Trump and Biden were not included in the list, they are following the same schema. Trump cut tax revenue and then didn't offset massive deficit spending on his way out the door. Biden's signature economic plan is stalled in part because he is making efforts at offsetting spending with increased revenue.

Presidents don't have sole control over spending. Congress plays a large part in it.

We like to have a singular villain to blame, it’s easier for people to process. Reality is never that simple.

Or hero.

Yep, the spending on the Viet Nam war and the deficits it created were a big cause of the inflation during the Nixon/Ford years. Carter pushed for a balanced budget which angered enough folks in his party to lead to Ted Kennedy primarying him from the Left in 1980.

Simply looking solely at the deficit doesn't prove one was a spendthrift. If you cut or fail to raise taxes enough, a huge deficit can occur without actually spending more than the previous administration. In fact, it is possible to have a huge deficit while spending less than the previous administration.

In Jimmy Carter's four years, the Federal Government's spending increased by almost 48%. In Ronald Reagans eight years, Federal Government spending increased only 53%.

https://www.presidency.ucsb.edu/statistics/data/federal-budg...

No, you aren't accounting for inflation. In constant 2012 dollars, US spending was $2T in 1977 and $2.2T in 1980. It was $3T in 1988. It was $3.5T in 1992.

https://www.usgovernmentspending.com/spending_chart_1970_201...

It’s not obvious to me that it’s right to inflation adjust the numbers here, since one of the main arguments people make against large government spending is that they think it causes inflation.

Do you really believe that when were are looking at the effects of deficit spending (such as inflation, debt, growth) the absolute number of dollars in the deficit is more important than an inflation or gdp adjusted number?

Imagine we passed a law that only made one tenth of currency still viable, and reduced the size of all owed debts and contacts denominated in dollars by 10x. Effectively making the dollar 10x more valuable. This would cut our absolute deficit spending by 10x. Would this then let us increase inflation adjusted government spending by 10x without suffering any ill effects from deficit spending? The obvious answer to that is no, which then implies inflation or gdp adjusted deficit spending is a far more important metric.

No, 70s inflation had nothing to do with Carter.

Inflation in the 70s preceded Carter. There was the oil crisis. It preceded that. Nixon ordered price controls ... in 1970.

No, 70s inflation had nothing to do with Carter's 'spending'. Carter's spending as a percentage of the GDP decreased from 1977 (19.65%) to 1979 (19.18%). It increased in 1980.

In no real universe was Carter anything but a fiscal conservative. In no real universe were Reagan and Bush anything but profligate.

Nixon ending the gold standard didn't help.

Clinton's "surplus" is a myth. The national debt increased every year that Clinton was in office and the tax revenue generated by his policies never exceeded government spending, which would be required in order to legitimately claim a surplus.

If you look at the numbers, the Clinton "surplus" was merely some fancy accounting achieved by borrowing money from government trust funds, like social security.

Do you have any mainstream references handy that delve deeper into this? Thanks!

The St. Louis Fed disagrees.

https://fred.stlouisfed.org/graph/?g=IuLV

> If you look at the numbers, the Clinton "surplus" was merely some fancy accounting achieved by borrowing money from government trust funds, like social security.

What numbers? Care to cite them?

Social Security has always held its surplus in t-bonds. Ergo, the government has always "borrowed" from SS. So I'm having trouble seeing how it was magically different under Clinton. And also why republican presidents don't use the same "fancy accounting" to make their deficits look lower.

You're confused: the annual "deficit" and the total "national debt" are two different things. The deficit is the difference between income and spending in a fixed time period. The national debt is the cumulative amount owed.

A balanced budget (i.e., zero deficit) or even a large but insufficient surplus doesn't stop the national debt growing. It's like a credit card. Even if every month you pay off what you spent the previous month (balanced budget), the interest keeps compounding on the principal you owe and your total debt keeps growing. Unless the government makes a serious effort at paying off the interest and paying down the principal, the national debt will keep growing. (Of course, the principal plus interest becomes the new principal on each compounding cycle, so the principal is a moving target.)

I am not confusing the deficit nor the national debt. I simply mentioned both. I addressed the deficit in my original comment. I'll do so again for the sake of convenience: Clinton's tax revenue was never enough to cover all government spending. In every year that Clinton claimed to have a surplus, government spending increased by a bigger amount than the claimed surplus. In other words, Clinton borrowed from other areas of government (social security, etc.) to fill the gap between tax revenues and government spending. Here are both the national debt and the deficit for the Clinton years:

  Fiscal Year     National Debt           Deficit
  1994            $4.692749 trillion      $281.26 billion
  1995            $4.973982 trillion      $281.23 billion
  1996            $5.224810 trillion      $250.83 billion
  1997            $5.413146 trillion      $188.34 billion
  1998            $5.526193 trillion      $113.05 billion
  1999            $5.656270 trillion      $130.08 billion
  2000            $5.674178 trillion      $17.91 billion
  2001            $5.807463 trillion      $133.29 billion

Since you brought up a credit card example, what Clinton basically did was pay down his Visa using his MasterCard. We are still paying off his MasterCard.

UPDATE: Fixed table formatting.

Picking one deficit is very different than averaging them: [0].

However I tend to agree that prior to Obama, presidents from the Democratic Party were the more fiscally responsible.

[0] https://www.thebalance.com/deficit-by-president-what-budget-...

Congress controls the budget, not the POTUS. Republicans controlled the senate, and Democrats controlled the house his first term, Democrats controlled both chambers his second term.

US Constitution: Article I, Section 8, Clause 1.

No, Article 1, Section 8, Clause 1 has nothing to do with the budget. It has to do with paying debts and collecting taxes.

Article 1 Section 9 Clause 7 is closer. It says Congress has to pass an appropriation before spending money. That’s still not budgeting.

The 1921 Budget and Accounting Act says that the President has to submit a budget proposal. Congress modifies and passes it. The President signs that or there’s a continuing resolution.

No, Congress doesn’t control the budget, either Constitutionally or procedurally. The President proposes one and generally gets most of what they want.

In fact, Congress doesn’t even pass a budget. The President proposes a budget, required by law, and Congress passes appropriations bills, required by the Constitution.

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