The good news is that infant mortality rates (deaths/1,000 live births in 1st year) declined by 80% between 1950 and 2000, from 35 to just 7 and have declined an additional 14% to a little less than 6 by 2018.
The main CDC page highlights the 5 main causes of death, the significant state differences (higher rates in the south central states, Ohio and WV, and differences by race. Black infant mortality rates (IMR) remain more than twice as high as non-Hispanic Whites. Asians have lower rates than Whites. Hispanic White infant mortality rates are “close” to the White rates.
The Petersen-KFF website provides clear summaries of the main dimensions of this public health area. About 2/3rds of deaths occur in the first month and are termed neonatal. The remainder in the first year of life are termed postnatal. Both neonatal and postnatal death rates have declined in the last 20 years.
Petersen provides more details on state level death rates, showing that the Great Lakes states have high rates similar to the southern states (7), while much of the country has much lower rates (5).
Births for mothers under 20 show death rates almost twice as high as those in their twenties and thirties.
Ten factors account for two-thirds of deaths, lead by congenital defects and early delivery/low birth weight which account for one-third.
The US mortality rate (5.8) is 75% higher than other countries with similar income levels (3.5). The world-class results in Japan and Finland come in at 2. Details in the way the US reports its figures may account for one-third of the difference versus comparable countries. While the US rate has declined from 7 to 5.8 in the last 20 years, the comparable group reduced its rate from 4.6 to 3.3. Various sources propose that socioeconomic inequality, racial differences and health care system differences account for the US’s poor performance.
The US Health & Human Services website highlights black-white differences in birth weights, SIDS occurrence, early births/low birth rates and causes of death.
The statistical analyses to disentangle socioeconomic status and race are very complicated. Most show that socioeconomic status accounts for half of differences, but not nearly 100%. This study found that maternal education, maternal marital status and maternal age “explained” much of the racial differences. Of course, the authors then point to poverty and income differences as underlying factors.
Several more recent studies point to systematic racism working through a large number of lifetime events which impact the mother’s health as the primary cause of racial differences in infant mortality rates.
One study of Florida births indicated that having a black doctor reduced deaths by 40% for black infant births. White infant mortality was not effected by the race of the doctor.
In summary, great progress has been made since WW II and continues to be made in the US. However, the reduction in death rates has slowed down. The US death rates are much higher than in other higher income nations and death rates in Europe and Japan have declined faster than in the US. US state death rates range widely, from 4 to 8. Black death rates are twice as high as white death rates.
There remains room for significant progress. World class 2 deaths per 1,000 versus 4.7 for American whites, 11 for American blacks, 4.2 for Californians, 4.6 for New Yorkers, 6.1 for Illinoisans and Floridians, 7.2 for Buckeyes, Hoosiers and Georgians, more than 8 for Mississippians and Arkansans.
Historically, for more than 200 years, economists, conservatives, industrialists and western countries have supported free trade, based upon the theories of Smith and Ricardo. Free trade creates more valuable goods and services. Free trade provides opportunities. Free trade forces domestic firms to become more competitive. The losers from free trade can have their losses mitigated through enlightened government policies. Leftists and labor unions have opposed free trade because governments have not always provided those “enlightened” policies to offset the negative effects on workers and because far leftists cannot support any positive results from capitalism.
Conservatives in the west have generally supported free trade for these last two centuries. Western firms and their beneficial owners were positioned to benefit (on average) from free trade. Part of this was the justification for imperialism and economic extraction from “less developed countries”, but most advocates saw the local, corporate and global benefits of trade. Republican support of free trade has been consistent in the post WW II era. Most Republican policy wonks agree with their Democratic colleagues that the great depression was deepened and prolonged by anti-trade legislation in the US and elsewhere.
Economists of mainstream political views tend to support “free trade” as a government policy which can provide benefits for countries and the global economy.
The free trade position has been opposed in the last 200 years by many. Leftists and less developed countries see this as gloss to justify exploitation. Marxists oppose capitalism. Labor sees the negative impact on domestic wages. Environmentalists see trade as a way to export pollution. Anti-globalization advocates see trade as a way to provide power to multinational corporations, so oppose it. Supporters of “less developed countries” argue that pure free trade unfairly prevents firms from developing. Incumbent firms argue that competitors have “unfair” advantages, including government support, that must be offset.
While the “science” and “interests” of free trade may be clear, the “politics” is less clear. In a simple, win/lose, Manichean view, evil foreigners attempt to defeat good domestic firms and their employees. Populist politicians of both left and right views are tempted to tap this voting block.
As with many modern public policy issues, there is a professionally supported position (pro, with some limits or compensations). However, the gap between the relatively complex analysis (comparative advantage, history, statistics) required to support these conclusions and votes is wide and used by politicians to frame and tell stories in their best interest, not the interest of the nation or its citizens.
James Carville once tried to greatly simplify American politics. I’m going to take a longer term view, back to the 1940’s, using the Gallup Poll’s “Most Important Problem” surveys. He’s only partly right, IMHO.
For 1948-83, I’ll use the top problem from each year to greatly simplify the analysis.
In the Cold War period (1948-62), the economy was most important 3/14 years (20%). International affairs, aid, war, peace, nuclear attacks, etc. held the top spot for 10/14 years (70%). Race was the leading issue in 1956 (tied).
From 1963-72, Vietnam, War and Peace dominated in 7/11 years (63%). Race was the biggest issue in 2 years (18%). Crime/violence first became a leading issue in 1968. Ethics, morality and families also first became a top issue in 1968.
Through the transitional 11 years of 1973-83 (Nixon, Ford, Carter, early Reagan), the economy scored 22 of the 23 votes. The “environment” in 1974 was the sole outlier. Foreign affairs scored zero after its 25 year reign. Inflation was the largest economic issue, as “stagflation”, supply chain disruptions, gas shortages and oil prices pinched.
Inflation placed in 2 of the next 4 years as an issue, but was a relatively unimportant factor thereafter, registering in just 7 of the next 32 years (23%).
In these first 35 years, the economy and international affairs were each half of the high visibility topics. Domestic affairs were a minor focus, aside from the issue of race, racism and race relations. The counterculture of the 1960’s and the reaction against it would have a greater impact later.
For the next 36 years, I’ll use a hybrid measure for important problems. Issues which were either in the “top 4” for the year or which claimed the attention of at least 10% of the respondents are recorded as important.
In this timeframe, economic issues wax and wane in importance, but overall they account for 42% of all topics. Economic topics at the end of senior Bush/Clinton were 70% of all responses. They declined in Clinton times to 40% and eventually just 20%. Economic worries increased to 40% in early junior Bush times, but declined to just 20% by the end of his tenure. Obama presided over the Great Recession, with 70% of economic topics ascendant, slowly declining to 30%. Trump inherited a healthy economy, with only 15% of those surveyed considering it a top issue.
In the late Reagan period (1984-88), the economy remains the primary focus with 2/3rds of the votes (14/22). The budget deficit/government spending becomes a priority, recognized in each of the 5 years as a highly important issue. Federal government budget deficits exceeded 3% of GDP for the first time since WWII in the Reagan presidency and remained at this level for a decade until a Clinton/congressional compromise returned it briefly to break-even.
International issues remained visible in Reagan times, with 5/22 votes (23%). With the end of the “Cold War” we have a dozen years with no priority international issues.
The first “emerging” domestic issue in the Reagan years was “drugs”. It was a priority for 3 of those 5 years (15%) and 6 of the next 12 years (10%). Democrats, some then and many now, claim that this was a veiled racist signal. Republicans, as in Prohibition, pointed to the direct negative impact on individuals and the collateral damage to others. Americans, in general, believed that “drugs” were a significant social problem for many decades, increasing with the more recent “opioid crisis”.
The Bush Sr years showed 50% attention (8/16) to economic issues: jobs, budget and overall. Drugs remained a major focus in 1989-92. Poverty became a material issue at this time, scoring a top rating in all 4 years and in 5 of the next 8 Clinton years. This generally Democratic favorable issue expired in the 90’s after “welfare reform” without major policy implications.
During Clinton times, economic issues were just one-third of the total (14/45). Foreign policy issues were non-existent. This created a vacuum for policy wonks and spinners to guide the public. Republicans clearly won this battle. The “war on drugs” continued, with moderate Democrats supporting additional measures. The “war on crime” was a top issue in 7/8 Clinton years. Again, Democrats pointed to veiled racism, while Republicans leveraged the statistics.
The “culture wars” began in earnest, with “ethics, morality and family values” becoming a priority issue in 4 of the 8 Clinton years, highlighted by his impeachment on moral issues.
Secondary education quality became a national political issue. The 1983 study of “A Nation at Risk” highlighted the shortcomings of the decentralized US public education system. Although Republicans sought to eliminate the national Department of Education, they effectively criticized the American public education “system” as inadequate, captured by unions and in need of a competitive challenge through vouchers. President Clinton could not dodge the challenge and made improving the education system a priority. President W Bush followed in his footsteps.
Clinton presided over the consolidation of American superpower status, the expansion of Republican promoted free trade, balanced budgets and the embrace of the capitalist market system (The third way). This was not seen as a Democratic win or compromise, but an opportunity to focus on domestic policy issues, by wise Republican strategists at the national level.
Clinton also attempted to deliver some form of national health care. He failed. But, this was a top policy issue in 4 of his 8 years. It continued to be an issue in the W Bush years, even though no solution was proffered. The basic criticism of “national government” (think Spiro Agnew) re-emerged in the Clinton years, earning priority status in 2 of his 8 years in office.
9/11 changed the world. In W Bush years, the economy ranked a top priority in one-third of minds (12/32). Terrorism and war in the Middle East was of the same magnitude (12/32). Crime, ethics, education and government became less important. Health care remained a priority (3/32) even though no “solution” was found.
In the Obama years, economic issues were rightfully the priority, earning two-thirds of the votes (19/30). The Republican driven “culture” issues were not as highly visible in this period. Health care was a priority issue, and continued to be so through the Trump years as Republicans fought to reverse this legislation.
The legitimacy/illegitimacy of the national government began as a criticism of the Clinton years. This faded in the W Bush years, but came roaring back for 8/8 of the Obama years. Once again, Democrats pointed to racism, while Republicans increasingly criticized the basic validity of national government decisions that restricted individual choice.
Trump inherited a solid economy and a world with fewer major active conflicts. Economic and foreign policy issues were not a priority. Traditional Republican “culture wars” issues were also less important to the public. Trump was able to raise immigration and trade to the status of important subjects. Health care remained an issue for 1 year with the failed attempt to unseat Obamacare and 1 year of Covid. Race became a priority issue for 4/4 Trump years. “Unifying the country” earned a top 4 spot in the last 2 years. Criticism of “the government” continued as a top 4 issue in all 4 years of the Trump presidency.
Across 70 years, the economy accounts for 44% of the votes. International affairs account for one-sixth of the votes. Domestic policy issues account for 40% of the total. Republicans were more effective at framing public thoughts, guiding their preferred domestic policy issues to be 25% of the total.
Most Important Problems: By Presidency and Category
There is significant politics and complex statistics in this subject area, but the basic outcomes are clear cut and positive.
High school graduation rates in the US increased throughout much of the 20th century. 1910: 10%. 1930: 30%. 1950: 60%. 1960: 70%. 1970: peak 75%. Then, graduation rates held steady or declined for the next 30 years! Various explanations are offered: increased graduation requirements, less effective educators, social challenges, mix of students.
The gold standard is the data from the National Center for Educational Statistics (NCES). We have 5 different measures. The first 3 provide 1977-2017 comparisons.
Annual dropout events have declined from 7% to 5%. They reached a minimum of less than 4% in 2007 before increasing. White dropouts declined from 6% to 4%. Black dropouts declined from 10% to 5%. Hispanic dropouts declined from 10% to 6%.
The dropout status of 16-24 year-olds collectively declined from 14% to 6% overall. Whites dropped from 12% to 5%. Blacks declined from 20% to 6%. Hispanics fell from 33% to 10%.
The percentage of 18-24 year olds who had completed high school (or GED) increased from 84% to 93%. Whites rose from 87-95%. Blacks rocketed from 74-94%. Hispanics rocketed from 59-88%.
The “adjusted graduation rate” measures on-time graduation. From 2010 to 2016 it shows overall improvement from 79% to 85%.
The “freshman graduation rate” measures on-time attainment of a regular diploma. It shows improvement from 71% in 1995-98 to 82% in 2012.
At the international comparison level, the US has improved from 18th of 21 OECD (advanced) economies in 2006 with a 75% graduation rate versus 81% average to 9th of 35 in 2018 with an 86% graduation rate versus the 81% average.
From Sputnik to “A Nation at Risk” to “No Child Left Behind”, the US has become relatively more effective at setting goals, measuring progress and adjusting educational strategies and tactics. Some groups essentially act as gadflies, pressuring politicians, educators, administrators and boards to improve.
These policy groups have become effective at identifying groups that are not meeting the goals and offering recommendations for improvements. For example, they were able to identify a relatively small number of schools that accounted for a majority of non-graduates (Pareto principle). The pejorative term “drop out factories” was applied to schools with graduation rates below 60%. A tail of low performing schools remains (for various reasons), but many low performing schools were closed or greatly improved in the last 25 years.
The leading group is termed “America’s Promise”. It has focused efforts on reaching a 90% graduation rate for every state, school and subgroup by 2020. Through the latest report from 2018, that goal has not been achieved, but solid progress has been documented. Graduation rates reached 85%, with 14 straight years of improvement. Between 2011-18 Black grad rates improved from 67-79%. Hispanic grad rates improved from 71-81%. Low income grad rates improved from 70-80%. Individual state scores demonstrated that even higher rates were pragmatically possible for all groups. In 2017, 2 states reached the 90% level. In 2018, 7 states met the target. They were from all corners of the country: Iowa, Texas, Alabama, New Jersey, Kentucky, Tennessee and West Virginia. This group noted that 7% of students in 11% of high schools accounted for 28% of non-grads. It also noted that 10 states account for 56% on non-grads. It outlined specific recommendations for continued improvement.
The post 1999, “No Child Left Behind” progress is questioned by some sources. They claim that increased accountability has lead educators and administrators to simply work the system by changing graduation requirements or fudging tests. Statistical reviews of state performance discounts the effect of these alleged activities.
Two measures of educational performance (NAEP and PISA) focus on elementary and middle school results so they cannot be used to confirm or dispute the high school graduation improvements.
College admissions of a greater percentage of high school grads supports the positive results.
College remediation requirements remain high, but no clear increasing trend has been documented.
SAT scores have not significantly changed during the last 40 years (math up and reading down).
US high school graduation rates improved from 10% to 70% between 1910 and 1970. They remained the same for 30 years as requirements were increased to meet the obvious challenges of a more competitive world (Sputnik, Japan, Asia, EU). Graduation rates have increased consistently for the last 20 years, mainly through improvements at the lowest performing schools. These improvements have slowed in the last decade, but progress continues to be made.
U.S. charitable giving to GDP ratio is 1.44%. Canada is second at 0.77%. UK is third at .54%. Italy at 0.3% is representative of Europe. U.S. giving is 5 times as high as other developed countries. (Table 27). U.S. private overseas aid is $44B. UK is second at $5B. (Table 25).
The World Giving Index has consistently rated the U.S. as the most generous country of 125 reviewed. Across 2010-19, US is 3rd highest percentage of those surveyed reporting they had “helped a stranger in the last year” at 72% compared with 48% global average. US was 5th highest with 42% reporting they had volunteered time for a charity in the past year versus 20% global average. US was 11th highest in percent reporting monetary donations in the last year (61%), versus global average of 30%.
In general, total US charitable giving has grown on a per capita or percent of GDP basis for more than 50 years. There is a clear “step up” in giving in the late 1990’s. Real (inflation adjusted) per capita giving has nearly doubled from representative $600 in 1970’s to $1,100 in 2000’s. (table 1). The US nonprofit sector reflects that growth, even though program fees are a much larger share of revenues, rising from less than 2% of GDP in the 1930’s-50’s to 3% in the 1970’s to more than 5% by the 2010’s. (table 6).
Total US charitable donations as a share of disposable income ratio has averaged roughly 2% across the last 40 years. Charitable giving as a percent of GDP averaged 1.7% in the 80’s and early 90’s, before increasing to 2.1% in the “oughts” and teens.
The most widely reported figure shows total real (inflation adjusted) US charitable giving since 1979. This has increased together with real US GDP. Representative years and amounts: 1982 ($150B), 1992 ($194), 2002 ($317), 2012 ($355) and 2019 ($450B).
Giving by individuals has fallen from 80% to 70% of the total. Bequests have increased from 7-8%. Foundation giving has more than doubled as a share of the total, from 7 to 16%. Hence, the real individual giving numbers are solid and rising, but their growth rate has slowed through time. 1982 ($130B), 1992 ($160), 2002 ($250), 2012 ($250), 2019 ($310).
While the total and individual charitable donation amounts have increased, the percentage of individuals donating has declined significantly. Years, percentages and average donation. 2002: 67%, $2,000. 2008: 65%, $2,300. 2012: 59%, $2,400. 2016: 53%, $2,500. Various authors speculate that the decline is caused by increasing inequality, lower confidence in institutions and changes in tax deduction laws.
In the early 2010’s there was a significant decrease in charitable giving percentages by non-itemizers (10%) and a much smaller decrease by itemizers (5%).
There are various reports that break down giving rates by state, city, religion, politics, region, marital status, generation and income. Perhaps most important is that the decrease in the giving percent from 67% to 53% means that the percentage giving zero, and dragging down the average, has increased from 33% to 47% of the population, from one-third to nearly one-half.
More than 90% of individuals with income above $125K donate to charity. 77% of those with incomes of $50-125K donate. This drops off to 58% at the $25-50K range and 37% under $25K (graph 11).
One source indicates that actual 2020 giving increased by 5%, with 1% more people making donations. This report also indicated that 23% of affluent donors increased their contributions to local projects and increased their unrestricted contributions.
Another source indicates that 2020 donations were up by 11% and the number of donors was up by 7%. They reported a 15% increase in small donations (<$250), an 8% increase in medium-sized donations and a 10% increase in large donation ($1,000+).
The US has a solid track record of individual charity. Donations have risen in real terms through time. Americans support nonprofits through cash and time donations. The decline in the percentage of individuals making donations is a concern. The “one-time” tax deduction for non-itemizing filers may help to spur increased contribution habits.
Indiana Coronavirus update. Daily cases are a little (-10%) lower. Last 3 weeks averaged 1,032 versus 1,144 in prior 3 weeks. This is up a little from the March average of 800 but way down from the Nov-Jan peak average of 4,700. Daily deaths have dropped even faster, from 75 at the peak to 11 in March to 7 in April/May.
The death rate is now less than 1%, compared with 2% last Fall and 1.6% during the peak infection period (improved treatment and age profile).
Indiana vaccination rate has lagged, after a positive early start, with 31% fully vaccinated. This is 39th best state. Median state is 36% vaccinated. 4 adjacent states are 35-37% vaccinated. Indiana’s vaccination rate (74%) for seniors (65+) is slightly better than the national average (72%).
National vaccines per day increased to 2M by the end of Feb and 3M by the end of Mar, peaking in early April. Daily vaccine rate declined to 2.6M at the end of April and continues to fall. Indiana follows the same pattern with 35,000 per day at the end of Feb, 42,000 at the end of March and April, but just 30,000 in mid-May.
At the county level in metro Indianapolis, the vaccine rates vary widely. Central Marion County is at 28% fully vaccinated. 4 counties are at 30-33% (Morgan, Johnson, Shelby and Madison). 4 others are at 40-41% (Boone, Hendricks, Hancock and Hamilton)
Indiana has 11 electoral college votes, tied for 13th most of all states. Indiana did not lose an electoral college vote in the latest census, although 3 neighboring states did. With 538 total votes, the average state has almost 11 votes, so Indiana is average by this measure. From 1872-1926, Indiana had 15 electoral votes. From 1932-40 it had 14. From 1944-88 it had 13. From 1984-2000 it had 12, so the trend is clearly downward.
Indiana can claim its fair share of U.S. presidents. 1 out of 46, with the 23rd president, Benjamin Harrison (1889-93). Indiana can partly claim Harrison’s grandfather William Henry Harrison who briefly served as the 9th president and who served as governor of the Indiana Territory from 1801-12, although he was not born there. Indiana also claims to be Lincoln’s boyhood home (1816-30).
Indiana also has its fair share of losing presidential candidates with Wendell Wilkie (1940) and Socialist Party stalwart Eugene Debs (1900-20).
Indiana truly stands out at the VP level, with 4 serving in this office: Charles Fairbanks (1905-9), Thomas Marshall (1913-21), Dan Quayle (1989-93) and Mike Pence (2017-21). It has provided 12 VP candidates.
At the Supreme Court, Indiana claims more than its fair share of the 120 justices with 4: Willis Van Devanter (1911), Sherman Minter (1949), current Chief Justice John Roberts (2005) and recently appointed Amy Coney Barrett (2021).
Since WWII there have been 35 individuals serving in the top political appointment office, the White House Chief of Staff. Ron Klain currently holds that role, as the only Hoosier to do so.
There has long been a divide between liberal arts colleges, research universities and institutes of technology. The gap between traditional four-year colleges/universities and commercial or technical schools generally remains.
In a fifty year period of growing enrolments, our major public universities have become larger and more complex. They have added colleges and majors. They have increasingly focused on winning research dollars. They have learned to compete for students. They have nearly all adopted the same brand strategy focused on “academic excellence”. The college ratings game essentially focuses on the ranking of entering student SAT scores. To succeed, universities have improved their facilities, increased financial aid packages and developed programs that attract high SAT students.
State universities secure alumni and corporate funding so that they can compete with other highly rated schools. State universities that were once positioned as teachers colleges, normal schools, agricultural and technical or urban universities all compete for the same academic rankings, investing in research labs, notable faculty and sports teams. Some clever universities specialize in a few niche colleges like insurance, architecture, entrepreneurship or media. They use brand excellence in a professional school or two as a substitute for higher rankings in the more prestigious arts and sciences.
Given the business world’s strong preference for industry specialization and experience, a more satisfying strategy for their students might be to specialize in a single broad industry. Charter and magnet schools do this at the secondary school level. Community/technical colleges often merge industry and professional skills into technical programs. A few older colleges like agriculture still produce ag communications, ag business and ag engineering majors.
A university could adopt a broad industry like medicine, distribution, trade, communications, government/NFP, manufacturing, agriculture or financial services. Professional and associate/technical degrees could be offered. In addition, degrees in support fields like business, marketing, communications, finance, IT, engineering and science could be offered. Courses could be developed to provide an industry overview, highlight industry firms, describe international opportunities and teach industry terminology.
If state universities want to contribute to state level economic development, they could make an immediate and lasting impact by specializing by industry.
Peggy Noonan’s suggestion to use a 36 inch ruler to gauge right versus left in politics does help to explain the opposing views of tea partiers, Republicans and Democrats. Noonan describes 0 inches as pure right and 36 inches as pure left (opposite of what you might expect). She bemoans her perception that modern-day politicians negotiate between the 25 and 30 inch mark on the far left end of the ruler. She asserts that tea partiers will try to move back to the 5 inch mark.
In politics, he who sets the framework usually wins the game. Using American history since the agricultural 1770’s, urbanizing 1860’s, industrial 1920’s or depression 1930’s as a base, a case can be made that post-war politics and economics has been debated on the left end of the ruler, with a mixed economy government share of GDP at 20% and government spending/taxing share of GDP at 25-30%. These shares of the economy double those of laissez-faire capitalism, the roaring twenties or the depression. Noonan takes this long-run historical view of how the yardstick should be labeled.
Noonan is right in pointing out that politicians of both parties in a democratic system inherently seek to spend more money. The rise in government spending in the Bush presidency after the unusual decline in government spending in the Clinton presidency (with Republican congress) is a modern reminder. Tea partiers are right to have gut level concerns that government spending will continue to climb unchecked. The trend in 2000-2008 was up. Extraordinary banking and industry bail-out funds were piled on top of the stimulus spending for the Great Recession. Health care and social security spending increases are expected in the next two decades. Whether the various spending increases are justified or not, the trend is clearly up, without any clear countervailing force in Washington.
Those on the left might agree with the challenge to be faced, but they use a different scale to gauge left versus right, object to the accusation that they have driven up government spending, hold the Republicans responsible for inciting anger in the tea partiers and offer different long-run solutions.
If the scale is set between 100% individual, 0% government pure libertarianism versus 0% individual, 100% government pure socialism, the Democrats argue that the post-war game has all been played on the right (0-18 inch) side of the ruler. Government share of GDP is 20%. Government spending and taxes share of GDP is 30-35%, including all transfers. This did not increase between 1960 and 2008. The US tax burden at 27% of GDP is only 75% of the 36% average level for 30 developed countries. Only Mexico, Turkey, Korea and Japan spend less than the US. Total government spending in western European democracies is 40-55%. Government spending did increase with the Vietnam War and Great Society policies, but was reduced by the Reagan revolution. Government spending fell from 37.2% of GDP in 1992 to 32.6% in 2000.
Democrats argue that their fiscal discipline was demonstrated in 1992 to 2000 when they balanced the federal budget and reduced the deficit, employing the “pay as you go” policy to force spending cuts to offset spending increases. They point to Bush led Medicaid and defense spending increases as the cause of increased government by 2008. They see the Bush tax cuts as redistribution to the wealthy and don’t see the overall tax-cut initiated economic growth claimed to increase net tax revenues.
Democrats argue that they have not purposely increased the long-run share of government in the economy. They claim that the one-time investments/guarantees for the banking/auto industries were necessary for the whole economy, addressed issues that had grown for decades, will be partially recaptured and do not require continued funding. Similarly, they pursued a moderate one-time Keynesian fiscal stimulus in response to a deep recession, just as was done by other governments of all parties in all countries for the last 60 years. The stimulus spending lies between the 4.7% of GDP boost in 1982 and the 2.3% growth in 1992. Democrats argue that these actions are necessary and moderate and would have been undertaken by a responsible Republican successor to the Bush administration.
Democrats argue they are unfairly characterized as “big spenders” by the Republicans. This simple accusation has stirred a populist response from “regular Americans”. While Democrats have historically focused populist rage on big business and big banking, the Republicans and tea partiers have effectively used big government, Washington, elites, foreign countries and religions as targets, tying them to the Democratic Party. Democrats argue that the monetarist, supply side, tax cut economic policies of the Republican Party since Reagan have been adopted for their populist simplicity and political effectiveness alone, further polarizing economic policy making.
Finally, Democrats have adopted part of the Republican play book in fundamentally looking to the private sector to drive the future economic growth required to support even the historic level of government spending. The stimulus spending was partially focused on future industrial growth and infrastructure. The banks and auto firms are returning to pure private ownership. Small business lending and investment tax credits have become a focus. Health care reform maintained private providers and insurers as the core of the system. The costs of the war in Iran have been reduced. A bipartisan group has been appointed to work on the Medicare/social security future. Steps are being taken to promote exports. A reduced public sector role for the mortgage industry has been proposed. Obama and many Democrats have continued the pro-business approach used by Clinton.
On the other hand, Republicans can fairly point to steps taken by the Democrats that indicate a continued desire to “tax and spend”. The stimulus bill benefited state government, construction and other Democratic interests disproportionately. Health care reform achieved growth in government commitments without structural cost solutions. Labor unions were given special treatment in the auto bail-out. Fannie Mae and Freddie Mac’s roles were not touched in the banking reform. The financial consumer protection agency smacks of unlimited and uninformed regulation. The proposed increase in taxes for high earners is significant and is not coupled with structural spending reforms. A second mini-stimulus has been approved and unemployment benefits have been extended to record lengths.
The current economic situation has raised the stakes for politics. We should expect to see ongoing attempts to define the ruler and place the participants at marks that favor one group or another in the public eye.
