U.S. Federal Deficits and Presidents

Stephen Bloch

Last update: figures from 9/30/2009

I ran across a Web site maintained by the Department of the Treasury, listing the U.S. National Debt year by year since 1791. The numbers by themselves are too big to be meaningful, so I put them into a spreadsheet to see if I could extract any interesting trends. Here's what I did:

1. Tabulated the national debt by year, back to 1911. (I originally went only back to my birth, in 1964, but then expanded the chart to 1911, stopping there because I ran out of CPI data.)
2. Subtracted each year's debt from the next year's, as a measure of one-year federal deficit (including interest paid).
3. In 1986, the reporting date shifted by 3 months, and in 1953 by 6 months, so these "years" were actually 9 and 6 months long respectively; I multiplied the deficits in these years by 4/3 and 2 respectively to give annualized figures. In fact, my spreadsheet has two rows labelled 1953.
4. Adjusted this annualized deficit by the annual Consumer Price Index to give one-year federal deficits in constant (1984) dollars.

After that, there were still several different reasonable ways to look at the data:

• How much did the annual deficit shrink or grow? I assume that the deficit in a President's first year is almost entirely under the control of the previous President and Congress, so I subtract the deficit in a President's first year from the deficit in the year after that President stepped down (or, in the case of the current President, from the most recent deficit figures I have). This change in deficit is then divided by the number of years it took to achieve it.
• How much debt was accumulated over a President's term(s)? The previous approach, looking only at starting and ending deficits, doesn't distinguish between a President who oversees initially increasing deficits, then decreasing at the end (like Reagan) and a President who oversees initially decreasing deficits, then increasing at the end (like Carter), even though the former racks up more of a debt. So I computed the average annual deficit over a President's term(s). (Note: I computed this as an average of CPI-adjusted annual deficits, rather than as the increase in national debt divided by the number of years.)
• Since many of the items in the budget are multi-year commitments with considerable inertia (most obviously, interest on the national debt!), I recomputed the previous numbers, subtracting the annual deficit in each President's first year; in other words, how does the actual accumulated debt per year compare with what it would have been if the annual deficit had stayed where it was?

Another interesting question would be to look at not the President's political party but the parties in control of each house of Congress, or the margin of control in each house of Congress, etc. (Do Democratic Congresses tend to increase or decrease the deficit, compared with Republican or split Congresses? Do closely-divided Congresses tend to increase or decrease the deficit, compared with Congresses in which one party has a solid majority?) I haven't tried that yet.

Since 2008-2009 was such an unusual year, I've included two rows for President G.W.Bush. The upper row is consistent with the treatment of all the other Presidents, effectively running from October of his first year in office through September after he left office. The lower GWB row is based on only his first 7 years in office, ending in September 2008, at which point a major recession had started but the TARP and other stimulus programs to fight it hadn't yet been enacted. The enormous Federal budget deficit in 2008-2009 was affected by taxation and spending decisions made by both the Bush and Obama administrations, as well as by the recession itself.

Table 1: Average change in annual deficit

Comments on Table 1:

The first seven years of the G.W. Bush presidency increased the deficit by half again as much as the 32 years from JFK through G.H.W.Bush combined, and somewhat more than the 24 years from Harding through FDR combined (remember, this is in inflation-adjusted dollars).

If one includes fiscal year 2008-2009 as part of the G.W. Bush administration (consistent with my treatment of all the previous administrations), that administration oversaw twice as much increase in Federal budget deficits as Presidents Kennedy through G.H.W.Bush put together.

Obviously, many of the reasons a deficit grows or shrinks are beyond the President's control: Congress, the economy, the beginning or ending of a war, the beginning or ending of a recession, etc. For example, the Great Depression and the beginning of World War II can be blamed for much of FDR's increase in the deficit, just as the end of World War II and the start of the post-war economic boom can be credited for much of Truman's matching decrease. I'm not sure what happened to Ford: he faced an economic recession, but so have many Presidents.

At least in my lifetime, Republican Presidents have placed high priority on cutting taxes, and placed lower priority on (or had less success at) cutting spending. Democratic Presidents have perhaps had equal success at cutting spending (I haven't researched those numbers), but have not been bound by any promises to cut taxes.

There may be other factors at work, e.g. the American people tend to elect a Democrat when things are at their worst and about to improve anyway, or something like that. Read into the numbers what you will.

Table 2: Average annual deficit

Comments on Table 2:

Again, Republican Presidents seem to rack up the big debts, at least in my lifetime. Democratic Presidents tend to be "troughs" in the above graph, relative to their Republican successors and predecessors. On the other hand, the only two Presidents in this table to actually run an average surplus (in the Roaring Twenties) were both Republicans.

The first seven years of G.W. Bush accrued more total debt than eight years of Reagan, and almost twice as much as twelve years of FDR. If you include 2008-2009, the 8-year G.W. Bush administration accrued almost as much total debt as the 8-year Reagan administration and the 12-year FDR administration combined. The biggest accrued-debt-per-year figures are associated with G.W. Bush, G.H.W. Bush, Ronald Reagan, Gerald Ford, FDR, Bill Clinton, and Jimmy Carter, in that order.

Table 3: Average deficit minus first-year deficit

Comments on Table 3:

Again, Truman is an outlier: he took office in the middle of World War II, which immediately followed the Great Depression. The Federal government was running an enormous annual deficit in his first year, so it would have been remarkable if it hadn't decreased during his term. FDR presided over most of the Great Depression, initiated many expensive government programs to fight it, and presided over the beginning of World War II; even so, his "average annual deficit minus first-year deficit" was about 40% of George W. Bush's, in inflation-adjusted dollars.

If you include fiscal 2008-2009, G.W. Bush's "average annual deficit minus first-year deficit" was over three times the corresponding figure for FDR.

Last modified: Mon Feb 1 22:29:49 EST 2010