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Memo: In A New Global Age, Democrats Have Been Far Better for the US Economy, Deficits, and Incomes (Updated)
Overview – With the debate in Washington soon to turn to budget and economic matters, we have updated and are releasing a memo we first produced in 2016. This short memo looks at the economic performance of the two American political parties when in the White House since the end of the Cold War.
We use 1989 as a starting point for comparison because when it comes to the American and global economies, the collapse of Communism and the non-aligned movement ushered in a new, truly global economic era, one very different from the one that came before. It is thus fair to see how the two parties have adapted to the enormous changes this new era has offered, and whether their policies have helped America prosper or struggle as we and the world changed.
As you will see from the following analysis, the contrast between the performance of the Democrats and Republicans in this new economic era is stark: 2 GOP Presidencies brought recessions, job loss, higher annual deficits, and struggle for workers; the 2 Democratic Presidencies brought recovery and growth, job and income gains, and lower annual deficits.
Based on these findings it is fair to assert that over the past generation the Democratic Party has been far more effective at crafting effective responses to a new economic era than the Republican Party. This case is bolstered, of course, when recalling the GOP’s spirited predictions of economic calamity when opposing both the 1993 Clinton economic plan and budget and the 2009/2010 Obama stimulus and “job-killing” Affordable Care Act. The Republicans have gotten it wrong now in four consecutive Presidencies.
While it will not be the subject of this short memo, our findings raise questions about whether the characterizations of the US economy as one not producing income and wage gains either over 40 years or over the past 15 years are accurate. It would appear that a more accurate description of the US economy in recent years is that with smart policies, Americans can prosper even in a more challenging and competitive global age.
We hope that commentators and policy makers keep the findings of this memo in mind as the Republicans roll out their budget and economic plans in the coming weeks. The Party’s track record on economic matters in this new age of globalization is not something that should inspire confidence in voters looking for plans that create jobs, raise wages and lower the annual deficit. It has been the other Party that has done that.