We keep hearing about big spending liberals but does that hold when we separate political fiction from fact. Senator Jim DeMint yesterday stated “The President made it absolutely clear today that Democrats will cling bitterly to deficit spending until our nation is bankrupt.” But most economists and even some conservatives are deriding the Paul Ryan’s budget. There is this idea that the party of tax and spend is the Democrats and the party of fiscal restraint is the Republican party. Does this hold when you actually look at facts or is this political rhetoric?
Let’s look at a graph (as an economist I love graphs!).
What I think we should really take away from this graph is that both parties like to spend not just one. The idea of fiscal conservationism has basically been thrown out the window since Reagan. Also, this idea that lower taxes create more tax revenue needs to be put in the fantasy column as well. This graph doesn’t include the Obama administration and we all know that the spending will be high while the revenues will be low because of the Great Recession. The point is that it is not just one party that likes to spend. All the politicians like to spend because it is good for getting re-elected when you can bring the bacon home.