As the Presidential posturing continues, is anyone interested in what Presidents have actually done with our money over the past 30 years? The Reagan defense buildup, the peace dividend, and the War on Terror explain much of the variation in total federal expenditures as a share of Gross Domestic Product over the past several administrations. Despite an aging population, spending on Social Security is at about the same share of GDP today as it was in the Carter Administration, although this is about to change as the baby boomers retire. Federal health care expenditures, which primarily benefit senior citizens, have soared as a share of GDP, although that growth was slower during the Clinton Administration. Federal spending on investments in the future – science, space and technology, energy, natural resources and the environment, community development and transportation – is much lower as a share of GDP than it was before the Reagan Revolution, though it has tended to increase somewhat under Presidents named Bush. Presidents named Bush also increase federal spending on the poor as a share of GDP, but overall spending on the poor is down as a share of GDP since the Carter Administration, with big shifts in the nature of that spending during the Reagan and Clinton administrations. And we’re lucky interest rates are low, because although the national debt is up as a share of GDP, the cost of interest payments has fallen, and a reversal of that trend could cause a downward economic spiral.

As demonstrated in my prior post, the Reagan Administration cut personal income taxes and subsequently raised payroll taxes, theoretically to save Social Security but in reality to pay for the income tax cut and other things. More on the other things later. Despite significant tax changes under subsequent administrations, this tax shift remains in place. In addition, the income tax code has been made vastly more complicated by higher rates combined with more deductions, exemptions, preferences, and favors, starting with the Clinton Administration and continuing in the administration of President George W. Bush. The same process has occurred at the state and local level in New York, with former Governor Pataki handing out this deal and that and sending checks, Mayor Bloomberg adding his own check, and former Mayor Giuliani pushing a special sales tax deal for clothing and cutting taxes for any individual company that got into his office and threatened to move to New Jersey. This is something that certainly didn’t change on Day One of the Spitzer Administration. In recessions, tax rates are raised to make of the lost revenue and service the debts. So, with payroll taxes up and income taxes down, and with tax rates rising and tax deals proliferating, who wins and who loses?

The main reason I have thought that Mike Bloomberg would not run for President if that third party candidates have never won.

 Whenever I and other skeptics have made this argument, Mike for President boosters and their ditto heads in the press have replied that Mike’s money makes him different- that when Mike spends a billion dollars to get known around the country, he’ll make history.
Now we have a WNBC/Marist poll of New York State voters.

http://www.observer.com/2008/indy-bloomberg-delivers-n-y-democrats

President Reagan wasn’t actually a great tax cutter, he was a great tax shifter, and his shift in the tax burden has remained in place ever since. A weak economy meant that President George HW Bush ended up with less personal income tax revenue despite breaking his “read my lips” tax pledge. President Clinton’s personal tax increases, concentrated at the top of the income distribution, really did increase tax revenues, because that’s where an increasing share of the nation’s income is going. The total federal tax burden, and the federal budget deficit, during the administration of President George W. Bush are different than in similar years of the administrations above. But W’s tax take and budget deficit are very similar to that under President Carter. With the exception of the Clinton Administration, all the additional payroll taxes to “save Social Security” since 1983 have already been spent, with IOUs deposited in federal accounts, and despite those additional revenues the amount of federal debt held by the public is 50% higher as a share of GDP than it was before the Reagan era. These are the findings when one tabulates federal revenues and expenditures as a share of GDP, for representative years of the last five Presidential Administrations, as I have in the attached spreadsheet.

Some days I think I understand a different language than the people who write about politics.

The following appeared in the LA Times in a story about (yawn) Bloomberg running for President.

Television hosts, including Ryan Seacrest of "American Idol," tried to get a straight answer out of Bloomberg during the New Year's Eve countdown. Bloomberg told Seacrest, "I will not run." Three days later, Meredith Vieira of NBC's "Today" show asked him to swear on his daughter Georgina that he wouldn't run. He replied, "I said to Georgina, I'm not running."

Those who have read my posts over the past two years know that state and local policy and regional economic trends, not national policy and macro economic trends, are my main areas of concern and expertise. In particular, right now I am more afraid of the next state budget than unstable, nuclear armed Pakistan. Since part one of the Presidential campaign begins and ends this month, however (with part two not beginning until September) I’ve decided to analyze and write a series of posts on the federal budget. One task in doing so is to try to standardize the measure of federal revenues and expenditures to disentangle the decisions made by each administration from the external conditions that had nothing to do with those decisions. This means adjusting the figures for inflation, and for the resources available in the country, something I do at the state and local level by tabulating state and local revenues, expenditures and debt as a percent of personal income, the best measure available for counties and up, and will do at the national level by tabulating revenues, expenditures and debt per $100,000 of Gross Domestic Product (GDP).

The late Rodney Dangerfield was a great comedian. His bread and butter line was: “I tell you, I get no respect”. It was from that set up that he then proceeded to self-deprecate; much to the audience’s enjoyment. I am going to steal Rodney’s line; but I won’t self-deprecate.

Given that blogging-as journalism goes- is a relatively novel methodology, I guess we cannot take ourselves too seriously at this point in time; despite the significant contributions that bloggers have made to news breaking. Remember the Monica Lewinsky/ President Bill Clinton story: that was broken on the blogs; not in mainstream media. There are countless others. Yet I can’t help but proffer that some of us (if not most) who do this, are serious about what we do: inform the political discourse, on local, regional, national and international levels. Thus there is a responsibility to the readers that we be credible, accurate, authentic and genuine.