Wednesday, October 27, 2004

November 2nd: The 1.3 Trillion Dollar Question

OK what's it going to take? The few people who have yet to make up their minds between Bush and Kerry, apparently the starkest differences on every major political issue aren't enough to sort it all out and make your Presidential choice clear. So I've got an offer for you.

How about some Cold Hard Cash? How about $1.3 Trillion Bucks?

In previous blogs, I've shown how
job growth is accelerated under Democratic administrations, how economic growth is accelerated under Democratic administrations, how Federal budget deficits are smaller under Democratic administrations and how Federal spending as a % of GDP actually shrinks under Democratic administrations. I've also laid down my argument as to why that is here and here. These posts used data stretching back either 50 to 100 years and shows common patterns trends regardless of which Presidential administration you look at. There is a real difference between the basic economic philosophy of the parties, and one philosophy, the Democrats, works far better in actual experience in all of these areas.

So what does it mean here? It is reasonable to assume that trends that have held up for decades will continue to hold in the next administration. If a Democratic administration and a Democratic Congress are elected next week we can expect one set of economic outcomes, while the reverse is also true.. We know that since WWII,
economic growth under Democratic leadership was on average about 4.5% per year (inflation adjusted.) We know also that economic growth under Republican control stood at less than half of this, at 2.1% per year.

This means that four years under Democratic growth plans will see a Gross Domestic Product that would stand over $1.3 trillion higher than under Republican 'stewardship'. $1.3 trillion. That's a lot of jobs. That's a lot of cash. That's about $4,500 for every American citizen. (Doing the math:
Latest GDP figures suggest that by inauguration day 2005 GDP will stand at about $11.8 trillion. 4.5% growth for four years brings that to over 14.1 trillion. 2.1% growth over four years brings that to 12.8 trillion.)

Note inserted 11/6/06: The above predicted figures are in constant, or inflation adjusted, dollars. The comparable inflation adjusted figure for GDP as of Nov. 2006 is $12.36 trillion, a bit higher than my forecasted 2.1% growth, which would have produced about $12.17 trillion at this point. Latest growth rate announced for GDP is an anemic 1.6% per year moving forward, meaning my prediction is basically on track.)

So for all those STILL on the fence for this election, think very carefully. Do you want $1.3 trillion MORE cash floating about the U.S. economy, or $1.3 trillion LESS? Let's break it down for you: based on the entire economic experience of the country since World War II, with a President Kerry and a Democratic Congress we are likely to have $1.3 trillion more in the American economy in four years than what we would have under a President Bush and a Republican Congress. That would be $1.3 trillion more to pay for new jobs, college tuitions, environmental cleanup, homeland security, home ownership for citizens, health care for all, decent schools for children, and have plenty left over for good old reckless spending on gidgets and goo gaws.

Is it clear now which way you have to go?


1 comment:

Jason G. Williscroft said...

Okay, now you ought to be ashamed of yourself. Bombast and cynical spin are one thing, but this time you aren't even trying! Read The Historical Effect of Political Alignment on GDP for a catalog of the ways in which your "analysis" is bunk.