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Tuesday, January 28, 2014

Do “Economic Progressives” Contribute More to the National Debt? A Preliminary Look

This essay was originally published in Christian Democracy Magazine and is based on an earlier blog post of mine. 

It is standard fare to depict the more economically progressive of the two parties dominating the American political system as big on government spending. It is because of the Democratic Party’s "fiscal irresponsibility", conservatives often argue, that our country is mired in debt. We can assume that this charge would be levelled more heavily against Christian democrats - hence why I think it is necessary to address such arguments (in other words, my interest in this short essay is not so much in defending the Democratic Party as it is in dispelling fears of “big government”). 

 The problem with this caricature is that Democrats are also portrayed as big on raising taxes. Since tax revenues and expenditures may, theoretically, cancel each other out, there's no prima facie reason to assume that Democrats contribute more to our national debt than Republicans. On the contrary, one might expect that the latter would add far more to our debt, given their supposed hostility towards taxes combined with their stronger support for military spending. 

So, who really contributes more to our debt - Democratic or Republican governments? I made an effort last year to answer this question. I measured Republican Party presence in government (by which I mean the presidency and Congress) for every year from 1948-2011, according to the simple framework illustrated in the table below. I then sought to determine whether a stronger Republican presence in government leads to lower annual debt increases (click here for data), and what I found might surprise those who peddle this "Democrats-are-more-fiscally-irresponsible" idea. 






As the graph to the bottom-left shows (click to enlarge), governments with a "strong" Republican presence (67-100%) have an average annual debt increase score of 7.47, 1 percentage point higher than governments with a "weak" Republican presence (0-33%). Further, the graph to the bottom-right reveals that "purely" Democratic governments - i.e., where the president and majorities of both houses are Democratic - have a slightly lower debt increase score than their Republican counterparts (4.92% versus 5.42%). 






In short, for both theoretical and empirical reasons, the notion that Democrats are significantly more debt-causing than Republicans appears baseless. We should not, therefore, fear the rise of a Christian democratic party - which would expectedly be more economically progressive than its Democratic counterpart - at least on the basis of its anticipated impact on the national debt.