Seeing Rudy Giuliani and Mitt Romney fight over who is more of a fiscal conservative made me think that they are actually barking up the wrong tree. You see, although the Republican Party claims to be the party of “small government”, and many fiscal conservatives vote Republican for that reason, the record shows that the last Republican fiscal conservative president was Richard Nixon. What? Not even Reagan? No. Reagan was no more fiscally conservative than the so much maligned Jimmy Carter.
The following set of charts shows Government expenditures as a percentage of GDP, quarter by quarter since 1947. This method allows us to really know how much money our government is spending, not in dollar terms, which are meaningless, but in relationship to the wealth of the nation.
There are three presidencies during which government expenditures declined significantly: Dwight D. Eisenhower’s, Richard Nixon’s and Bill Clinton’s. Maybe it is just a coincidence that the two presidents that did more to reduce government expenditures were attacked from Congress.
So, let’s see in greater detail how Republican administrations fared compared to Democratic administrations. Not surprisingly, we see a big spike in government expenditures relative to national wealth during the Truman administration. This is during the Korean conflict, from 1950 to 1953.
In 1953, we find the first post-war Republican president, Eisenhower.
Eisenhower was able to reduce government spending from a top of 24.5% of GDP to a low of 20.05% of GDP. After that, the next relevant spike is during the Johnson administration and the Vietnam War.
Amazingly enough, the Vietnam War was, in relative terms, less expensive to the Nation than the Korean conflict. The number of dollars spent is much higher, of course, but in terms of the national wealth, the expenditure is lower than it was during the Korean conflict, with a top of 23.3% of the GDP. You could say that richer nations can afford wars that are more expensive.
And now, for Dick Nixon.
As you can see, during the Nixon administration, government expenditures were curbed from 22.7% to 20.2%, a brave effort that wiped 2.5% but which pales compared to Ike’s.
After that, nothing much happens really. So I am going to jump to the revered Ronald Reagan, who is the one who cemented the double talk of small government and big spending.
And here is when we come to face the myth of smaller government, a myth created by the Reagan administration and perpetuated by the current administration.
As you can see, Reagan took the size of the government from a low of 19.7% to a high of 21.6%. All to leave it at the same level he had found it. What he did do, was to destroy much of the social programs created during the Roosevelt Administration, with a government that was even bigger than Roosevelt’s. In fact, up to the Second World War, the government was never bigger than 20.7% of the GDP, and this is during the years of crazy government spending to get out of the big depression. What’s more, at its lowest point, the Roosevelt government was only 18.3% of the national GDP, a level never achieved by any other Republican up to President Bush.
What did I just say; George W. Bush is in fact a fiscal conservative? Well, the truth is, no. He is not. As a matter of fact, during his administration, the size of the government relative to the wealth of the nation grew by almost 2%.
So, where is this myth coming from? How come reducing social programs does not reduce government expenditures. The sad truth is that Republican politicians have been lying to their base for the past 25 years.
The chart of Nondefense expenditures relative to national GDP does not match any of the spikes or rises on government size.
As you can see, other than the spike during the Truman administration, and the one time low during the Eisenhower administration, the “big government” size is not dependent on reducing the social programs (reflected with other expenses on this chart).
Why and when does the government grow?
You just saw the answer. The biggest contributor to “big government” is national defense, not social programs.
The history of Big Government since 1929 looks like this.
If you are a fiscal conservative and you were thinking on voting republican, you may need to think again.
- The last fiscal conservative Republican president was Richard Nixon (although he was highly interventionist, and if he were judged by the same standards fiscal conservatives applied to FDR, a socialist)
- You may think that social programs are not the solution, but neither are they the problem
- It is war, and not social programs, where the government gets fat
- Imperialistic adventures are the source of our fiscal problems, not a solution for our Republic
Franklin @ November 30, 2007