Who Increases National Debt More? Republicans or Democrats?
Check out this interesting graph of how the National Debt increased under each president since 1938.
Prior to the Neo-Conservative take over of the Republican Party there was not much difference between the two parties debt philosophy, they both worked together to minimize it. However the debt has been on a steady incline ever since the Reagan Presidency. The only exception to the steep increase over the last 25 years was during the Clinton Presidency, where he brought spending under control and the debt growth down to almost zero.
Comparing the borrowing habits of the two parties since 1981, when the Neo-Conservative movement really took hold and government spending really has gone out of control, it is extremely obvious that the big spenders in Washington are Republican Presidents. Looking at the only Democratic President since 1981, Mr. Clinton, who raised the national debt an average of 4.3% per year; the Republican Presidents (Reagan, Bush, and Bush) raised the debt an average of 10.8% per year. That is, for every dollar a Democratic President has raised the national debt in the past 25 years Republican Presidents have raised the debt by $2.59. Any way you look at it Conservative Republican Presidents can not control government spending, yet as the graph above clearly shows, President Clinton did.
What I find even more interesting about the chart is to see the exponential increase in debt after Richard Nixon drove the final nail in the coffin of the gold standard.
Most countries began abandoning the gold standard in the 30’s and as the world prepared for World War II there was massive borrowing around the world. (Banks make a lot of money from war debt.)
In the years that followed, nations pursued bilateral trading agreements, and by 1935 the economic policies of most Western nations were increasingly dominated by the growing realization that a global conflict was highly likely, or even inevitable. During the 1920s the austerity measures taken to restabilize the world financial system had cut military expenditures drastically, but with the arming of the Axis powers, war in Asia, and fears of the Soviet Union exporting communist revolution, the priority shifted toward armament, and away from re-establishing a gold standard. The last gasp of the nineteenth century gold standard came when the attempt to balance the United States Budget in 1937 led to the “Roosevelt Recession.” Even such gold advocates as Roosevelt’s budget director conceded that until it was possible to balance the budget, a gold standard would be impossible. [boldface added]
War is always an excuse for massive spending, taking money from the taxpayers and giving it to the politically well-connected special interests that wanted the war to protect their power and profits in the first place.
See my related post about the relationship between war and fiat money, War Brings a Return of Fiat Money.
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