George W. Bush: Stimulus President
One aggravating element of today's economic debate is how conservatives oppose stimulus spending even as they trumpet the economic record of past Republican presidents.
As Paul Krugman notes in his column today, the economy under President Reagan benefitted greatly from growing spending -- including Reagan's huge defense build up and, less well known, increases in state and local government spending. Reagan, notes Krugman, was a Keynesian: a president who pulled America out of a recession by massive deficit spending and the aid of expanding local government.
Something similar could be said about George W. Bush. One spur to the economy under Bush, following the recession of 2001 - 2002, was massive new security spending in the wake of the September 11 terrorist attacks. Defense spending nearly doubled during the Bush years, and spending on veterans benefits and foreign aid/diplomacy also doubled. Bush's new prescription drug program also added to domestic spending. Overall federal spending rose from $2.3 trillion in 2001 to $3 trillion in 2009 -- a 30 percent increase.
And, of course, Bush's big tax cuts also had a stimulative effect.
As with Reagan, Bush relied on heavy deficit spending to make all this stimulus possible, piling up over $4 trillion in new debt.
And, as with Reagan, the economy under Bush benefitted from a big expansion of state and local spending. Annual government outlays at this level expanded by nearly a trillion dollars, or 1 percentage point of GDP. (State and local governments also borrowed heavily during the Bush years to help finance this new spending.)
Given the huge binge of new spending, borrowing, and tax cuting under Bush -- perhaps the biggest orgy of Keynesian excess since World War II -- the only wonder is that the economy did so poorly during this period. Bush had the worst record of net job creation and overall growth of any postwar president.
I often cite the mediocre economy under Bush as evidence that huge tax cuts can't work magic, as is so often claimed. But this record offers a cautionary lesson for progressives as well: new spending isn't necessarily a pancea either (although, for sure, a lot of the new Bush spending was in the form of defense spending, which is not the best way to create jobs).
Whatever the case, the point is that there is nothing especially conservative about the economic records of either Reagan or George W. Bush. If either of these presidents had to live by the kind of austerity now advocated by Republicans, their records would be much worse.