United States Federal Spending: Republican or Democrat Problem

Previously we took a look at United States Gross Domestic Product (GDP), national debt and total national revenue. Together they present an alarming picture of the financial ill health of the United States of America.

At a glance, the chart reproduced to the right shows that the national debt is growing completely out of control and is currently on an unsustainable trajectory. The rate of borrowing that we are currently engaged in cannot continue and must be addressed by the next Congress, if not sooner. Today we will be taking a look at how this mountain of debt has accumulated primarily by examining which of the two major political parties was in control of congress at the time the debt was incurred.

Constitutionally, it is Congress that spends the money. The President cannot spend one dime that Congress has not authorised. To blame spending on the President of the United States is not accurate since even if the President asks, it is up to Congress to say "Yay" or "Nay" to the spending. Ultimately it is the responsibility of the 535 members of the House and Senate as to how much is spent and how much of that is borrowed.

The 97th Congress marks the start of the Reagan years, and both political parties were screaming about the deficits for those years. But the Reagan deficits pale to insignificance when you look at what is going on today. The chart above also clearly shows the effect of the Gingrich revolution when Republicans took over both houses of Congress in the '94 elections: deficit spending was being tamed. You can also see the effects of 9/11 and the choice to fight two wars of choice while simultaneously lowering tax rates - the wisdom of which is an argument for another day.

Then along came the financial and housing market collapse and Congress went hog wild. Today's deficits tower above any of the preceding years. And thus we have a crisis. With the economy still stagnating it is hard to justify the massive increase in the national debt as having been necessary. Especially since this massive overspending doesn't seem to have done much good.

Republicans claim that when they are in charge of Congress deficit spending is under control. The data appear to bear them out. During this period, 1981-2012, there are 12 years where republicans controlled both houses of Congress, 12 years when Democrats controlled both houses and 8 years with split control. The numbers work out like this:

• $6.505 trillion increase in national debt when Democrats are in control.
• $3.554 trillion increase in national debt when Republicans are in control
• $4.808 trillion increase in national debt when control is split between the parties

Democrats claim it is just the opposite and they are the proper guardians of the nations purse. If you assume that the massive federal spending was necessary to counter the ill effects of the current economic recession and as a result don't count the 111th and 112th Congresses (2009-present) then the numbers look like:

• $2.534 trillion increase in national debt when Democrats are in control
• $3.554 trillion increase in national debt when Republicans are in control

But in order to make the Democrat case, you have to ignore a couple years, years where the deficit soared.

The reality is that deficit spending is out of control, and from here it looks like this is a problem that can be laid directly at the feet of the Democratic party.

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Next up, Where Does the Money Go?