The Clinton Years vs The Bush Years – A Pet Peeve I have

Casey B. Mulligan, professor of economics at the University of Chicago, made a comment that he should know is disingenuous, he wrote:

the “big spending Democrat” stereotype is incorrect — government spending / GDP fell under Clinton and increased under Bush.

This comparison, used to argue that when it comes to spending there is no difference between Republicans and Democrats,  is made often, both in the blogosphere and by academics who should know better. The main problem I have with it is that it is not comparing apples to apples.  Milton Friedman argued that the best form of government, from a small government and low spending perspective, is a Democratic president and a Republican Congress, where Republicans control the spending (congress), and Democrats control foreign policy – precisely what we had under Bill Clinton. The worst form of government is when the same party controls the presidency and congress – precisely what we had under George W Bush.

In other words, you are comparing arguably the best scenario under a Democratic president with the worst scenario under a Republican president – of course they are going to be alot closer than what they really are. Don’t get me wrong: I am not arguing that Republicans are true fiscal conservatives, no, I am arguing that the gulf between the two is larger than what these “Clinton years vs Bush years” argument would lead you to believe.

The difference between the two is even larger when you compare the kind of spending each does: Republicans tend to overspend on wars while Democrats tend to overspend on entitlements. Wars are temporary, they are one time events that come to an end, whereas entitlements are forever and worst of all, they get more inefficient and expensive with time. Take FDR and LBJ – both were involved in wars and both created entitlements, FDR with World War II and social-security and LBJ with the Vietnam war and medicare. Yet today we worry about the growing costs of social-security and medicare while the financial costs of World War II and Vietnam, though expensive at the time, are now but forgotten.

And Bill Clinton would not have been any different, had he had more control of congress, Matthew Yglesias explains:

If the health care bill that the Clinton administration authored, pushed for, and staked its presidency on had passed you would say that FDR, LBJ, and Bill Clinton were the three main architects of the modern welfare state. Because the bill didn’t pass, the institutional legacy of the Clinton years is considerably more moderate than that and the Clinton administration is instead remembered for its responsible stewardship of national affairs. But that’s because congress blocked the bill not because of Clinton’s moderation.

That was the Republican controlled (for the first time in ~50 years) congress that blocked the bill.

A better comparison is between the Bush years and the Obama years – but given the fact that in Obama’s first 100 days in office, he’s already proposed spending more than Bush spent in his entire 8 years, including both wars, its a strong argument that there really is a difference between the two parties. Especially considering that most of Obama’s spending comes in the form of very expensive entitlements – entitlements that Obama is hoping will last forever.

You can argue that entitlements are worth the costs, that is an argument for another day, but you can’t make the argument that the spending is the same between the two parties.

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