So Democrat Presidents fare better at managing the economy… really?

Liberal leaders and their minions constantly grandstand about how much better they are for the broad economy and that they are FOR the middle-class, blah, blah, blah. In truth, Democrat leaders have caused significant financial hardship for the middle-class and shouldn’t be left in charge of the American economy.

Presidents Are Not Elected Kings

Presidents are not Kings and to pass legislation they need both the House and the Senate to make it happen. They cannot unilaterally institute policy. This is the balance of power envisioned by the founding fathers of America. It works well when different parties occupy the Executive and legislative branches or when a Republican controls all three. You will see why in a moment.

The Truth is in the Numbers

In the last 100 years, starting when Woodrow Wilson was in the White House, there have been 17 presidents in office. From those, 8 were Democrats and 9, Republicans. During the same 100 years, Democrats enjoyed total control of Government (the Presidency, the Senate and the House) for 38 years – let’s call this a Clean Sweep. The Republicans only had control of all three for 18 years, the remaining 44 years were a mixed bag. Why is this important? Because when the executive and the legislature are from the same party, it is their vision entirely that gets enacted.

image source: commons.wikimedia.org

When a Democrat has a Clean Sweep, liberal and socialistic policies are enacted – this has proven economically disastrous. When Republicans have a Clean Sweep, pro-growth policies are born; sometimes it takes a little patience to see the end result with Republican economic policy, but that is the Conservative mentality after all – a focus on sustainability and steady economic improvement (not looking for the quick hit).

There is one critical statistic that needs to be examined from an economic standpoint to fully grasp which party is best for the country: INFLATION. The rate of inflation faced by the US during the Clean Sweep years sums up my entire point.

When you compare the inflation rate side by side, during the Clean Sweep years for both parties, all the liberal fairy tales come crashing down. It turns out that the average inflation rate during a Clean Sweep, meaning a single party control of the White House, Senate and Congress, is grossly higher when it’s a Democratic Clean Sweep as opposed to a Republican one. The average annual inflation rate during a Republican Clean Sweep is 0.55%. The average annual inflation rate for a Democrat Clean Sweep, 5.8% - that’s ten times higher than the Republican rate. Any country that averages a 5.8% inflation rate for a few consecutive years is flirting with economic disaster. The threshold for a tolerable inflation rate is typically around 2.5% (in a developed nation). An inflation rate of 5.8% brings into question the trustworthiness of a nation’s currency.

It’s the economy, stupid!

If you don’t really get what the big deal about inflation is, and I know most Democrats ignore this vital statistic, look at it this way; inflation is like a cancer that steals hard earned savings. Inflation makes it more expensive to put food on the table, buy a home and send your children to college. And no, inflation doesn’t guarantee higher wages (certainly not 5.8% a year in higher wages!). As an example, just look at the inflation rate during Carter’s tenure and the lack of growth in wages (also known as stagflation).

If you save a dollar, and inflation is 4%, in five years, that dollar will be worth roughly 77 cents. So imagine if the Liberals had Clean Sweep power for a decade. Given the average inflation rate when they are in full command, $1 now would be worth roughly 40 cents in a decade. How’s that for liberal policies?

On the flip side, with Republicans in full command (Clean Sweep) for a decade (using historic results as our guide), the benefit to hard working savers is huge. $1 today would be worth roughly $0.94 in ten years.

It goes even further than that if you look at the income tax numbers. In 1916 Woodrow Wilson, a Democrat in the White House, oversaw the increase of the highest tax bracket, going from 15% to 67%. In 1918, still under Wilson, it escalated to 77% for those earning $1,000,000 and above. As soon as Harding (Republican) came into office in 1921, he reigned in the rates and got the highest bracket to 58% then to 46% a year later. In 1925 Calvin Coolidge, also a Republican, oversaw a further reduction to 25% for $100,000 as the highest tax bracket. In 1932 under Roosevelt, a Democrat, it was back to 63% escalating to 79%, 81% and then 94%.

For those of you who say that it doesn’t matter whether the rich have to pay such lofty rates, think again.

When millionaires are taxed at a higher rate, consumers and the working class are negatively impacted (costs increase for products); jobs are lost because less cash is available for expansion and eventually those millionaires lose motivation to work as hard (resulting in the worst outcome possible).

Think about it…

Say you were making $2 million a year while Woodrow Wilson was in power. You would essentially be going to work Monday through Thursday for the government and Friday would be your day to keep your earnings. Under FDR it would have been even worse than that. What’s the likelihood of you losing interest in risking capital and working hard when you’re being taxed so heavily? I’d suspect quite high.

But wait, it’s OK because don’t the Liberals protect the middle-class?

Republicans Tax the Middle-Class Much Less than Democrats

I’m sure many Liberals will say that it doesn’t matter if we tax the rich more even after all the points I’ve highlighted about how it shrinks the tax base, causes consumer goods to rise in price, weakens the job market etc… but they can’t weasel their way out of explaining that Democrats rarely, if ever, lessen the burden of taxes paid by the lowest earners in the country and middle-class. As a matter of fact, under FDR, the President Liberals use as their poster boy, the lowest tax rate in the country (for the lower middle-class) nearly quadrupled. During his tenure, the lowest tax rate went from roughly 6% to nearly 20%.

image source: http://www.flickr.com/photos/tonythemisfit/2866406076/

All through Truman’s Presidency the highest tax rate remained above 90% and the lowest tax rate well above 20%. The highest tax rate remained steady at 70% through various Presidencies until Ronald Reagan pushed it down to 50% in 1982 and down further to 38.5% in 1987 and finally to 28% in 1988.

chart source: http://www.verisi.com/resources/us-marginal-tax-rates.html

Increasing Taxes is the Lazy Liberal Way

The bleeding hearts have been excessively taxing for decades and giving it away at their discretion; this is a fact. What is a lesser known fact is that Liberals have been taxing the lower-income-earners at higher rates than Republicans for years as well.

image source: http://www.flickr.com/photos/76657755@N04/7027608495/

The Clean Sweep Years Show the Democrats’ True Colors

I mentioned earlier on that when Democrats had a Clean Sweep of the Presidency and the two legislatures, inflation averaged 5.8% - and 0.55% under Republicans. Why does this matter? Under a Clean Sweep, the President gets to run his programs without the need for bipartisan support. That’s the true measure of effectiveness. An unrestrained Republican gives us 0.55% inflation; an unrestrained Democrat gives us 5.8%. Remember, inflation is no different than a hidden tax.

Still think Democrats are better in the White House?

Here is something else for you to ponder. In the last century, Democrat Presidents with Clean Sweep legislature have raised taxes by an average of 56 percentage points; while Republicans with Clean Sweeps have reduced it by 27 percentage points. What’s better for you and your family? Paying more in taxes or less? Would you rather keep that extra $5k in your pocket and put it towards your child’s college education or give it to the government to decide what is best for society?

The Numbers Don’t Lie

Social policies are good, to a certain extent. Yes, taxes to build roads and keep them maintained are needed. Taxes are also needed to pay emergency response units as well as build defenses that protect our interests, and we all must chip in, but let’s not go overboard. Certain expenses should be left to the individual so we can all maintain a necessary and god given freedom. Higher taxes and more spending has never been the right solution for a struggling economy… never.

You know the old saying, “Give a man a fish and he eats for a day, teach a man to fish and he eats for a lifetime.”

If you want to know why people who love their freedom look forward to Republican presidents, look at the times when Democrats had full control over the Senate, House and presidency and you will see a trail of destructive economic policies which the citizens ALWAYS ended up paying for.

The numbers are clear; the economy and American households are better off under a Republican president, especially when he has like-minded adults in the House and Senate to see the virtue of lower taxes and lower inflation. It’s when the Republicans’ conservative principles are upheld that the economy advances and individual freedom improves. That’s why a Republican President is what’s best for America.

Stay hungry,

Aaron

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