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Sunday, June 06, 2004

If You Want to Live Like A Republican, Vote Democratic (part II)

In a recent blog I laid out the fact that economic growth under Democratic Party controlled administrations is significantly higher than under Republican administrations, at least for the last 52 years. Further, the highest average growth rates have occurred under Federal governments with a Democratic President and a House of Representatives controlled by Democrats. (Budget/finance bills originate in the House, not the Senate, by order of the US Constitution. So Party control of the House is much more important on economic issues.) Well, 2003 data has been added to the mix, so we now have 53 years of data to look at. We've had 17 years where we had a Democratic President working with a Democratic House. In those years, inflation-adjusted real GDP growth averaged 4.5% per year. In the 6 years when a Democratic President had to contend with a GOP run House, GDP growth averaged 3.9%. In the 26 years when we had a Republican President and a Democratic House, GDP growth averaged 3.0%. Finally, in the five years when the Republicans controlled both the House and the White House, GDP growth was a tepid 2.1%.

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My reasons for reposting this topic are two fold. First, I wanted to update the numbers with 2003 figures, which, by the way, come straight from the Bush administration's Office of Management and Budget's FY2005 Budget report. Included in the historical tables is an Excel spreadsheet that lists each year's GDP along with a "GDP Deflator" that, when multiplied against GDP, gives you an inflation adjusted constant dollar GDP. A little spreadsheet work from there gives you averages under different regimes. The second reason is to test Blogger.com's new support for imbedding images with the chart above that graphically illustrates how much more profitable it is for the country to go Blue.

2 comments:

Richard said...

Well I see the comments are enabled. I hope this is working properly.

Anonymous said...

Intriguing research - from what I can remember from economics in college, there was always a debate as to whether the economy was more affected by the current term lawmakers and/or president or the ones from the previous term(s). How much of a delay is there between policy making and real-life effects? I'm curious to see the same numbers run but for the previous president/house.

I have always philosophically believed that a balanced leadership was the most effective (Dem Pres/GOP Congress or vice versa) on all fronts. Thanks for at least putting the economic aspect of this relationship to the "numbers" test.