“Any man can make mistakes, but only an idiot persists in his error.”
-Marcus Tullius Cicero 106 BC - 43 BC
"The fiscal year is the accounting period for the federal government which begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2013 begins on October 1, 2012 and ends on September 30, 2013." 1 (since 1977)
Therefore, the economic results of a president's first year in office are affected by the economic policies in force during his predecessor's last four months in office, i.e. October almost through January. The figures in the chart below came from the Office of Management and Budget (OMB). 2
We have almost 40 years of empirical evidence proving that Republicans who support supply-side economics are dumber than chimpanzees.
When Ronald Reagan became president, deficits had been relatively low for thirty-six years; since the end of WW II. The national debt was less than $1 trillion. 3 Reagan was a fierce opponent of deficit spending. During his first inaugural address, Reagan said,
"For decades, we have piled deficit upon deficit, mortgaging our future and our children's future for the temporary convenience of the present. To continue this long trend is to guarantee tremendous social, cultural, political, and economic upheavals."
When Reagan embraced the simple-minded Laffer curve in 1981, I knew that he and Laffer were both idiots for thinking that net government revenue was a function of a single-variable. Reagan thought that tax cuts would reduce deficits. Instead, he and George H.W. Bush tripled the national debt in 12 years.
Reagan later told his biographer, Lou Cannon, that the new debt was the "greatest disappointment" of his presidency. 5
In 1993, congress passed and President Clinton signed the Omnibus Budget Reconciliation Act of 1993, also known as the Deficit Reduction Act of 1993. It created top marginal income tax rates for individuals of 36% and 39.6%, and a 35% income tax rate for corporations. Republicans all predicted dire consequence, including that they would stifle innovation, kill jobs, and would not reduce deficits. Not a single Republican voted for the bill. As the chart shows, they were all completely wrong regarding deficits. If every Republican in congress had been replaced by a chimpanzee and the chimps voted by pressing buttons at random, half of them would have gotten it right. All of the Republicans were wrong. Among the supply-side baboons were John Boehner, Newt Gingrich, Chuck Grassley, Orrin Hatch, and Mitch McConnell.They were also completely wrong about their other predictions. 7
Let's look at some of what actually happened during the Clinton administration: 11
- The 1993 Deficit Reduction Plan, which raised income tax rates to pre-Reagan levels, was passed without a single Republican vote.
- Federal income taxes as a percentage of income for the typical American family dropped to their lowest level in 35 years.
- Economic growth averaged 4.0 percent per year, compared to average growth of 2.8 percent during the Reagan-Bush years.
- The Clinton years were a period of unprecedented innovation, including the founding and spectacular success of such companies as Google, eBay, and Amazon.com.
- More than 22.5 million created jobs in less than eight years - the most ever created under a single administration. Of the total new jobs, 92 percent were in the private sector.
- Median family income up $6,000 since 1993.
- Lowest unemployment rate in more than 30 years, down from 6.9 percent in 1993 to 4.0 percent in November 2000.
- Lowest inflation since the 1960s, averaging 2.5 percent, down from 4.7 percent during the previous administration.
- Highest homeownership rate on record, reaching 67.7 percent in the third quarter of 2000.
- 7 million fewer Americans living in poverty.
- Lowest teen birth rate in 60 years.
- Lowest infant mortality rate in American history.
- Lowest crime rate in 26 years.
Finally, with the Clinton tax increases, the deficit was reduced and Clinton actually left office after three straight years of budget surpluses. 12
The chart shows the spectacular reduction in deficits under the Clinton administration. Every year was better then the previous one, culminating in increasing budget surpluses for the last three years of his administration. When George W. Bush became president, Republicans controlled the House and Senate. They immediately reversed the progress that had been made under Clinton and created the largest deficits and largest debt in American history. 3.6 million jobs were lost in 2008 and 598,000 were lost in January 2009, the worst one-month loss in 35 years. 8 The Bush administration increased the national debt by $4.5 trillion and destroyed the economy, with 700,000 jobs per month being last at the end of the Bush presidency. The budget deficit for fiscal year 2009, left by Bush for Barack Obama, was $1.4 trillion. 9
If that were not bad enough, on the night of Obama's first inauguration Republicans, conspired to prevent him from doing anything that might repair the damage they had caused. They are still at it, willing to destroy the country for the sake of their political ambitions. 10
Despite Republican obstruction, the Obama administration cut the national deficits in half and the unemployment rate in half.
During the 2016 presidential campaign, Donald Trump promised that he would eliminate the national debt in 8 years. When he became president, he surrounded himself with supply-side baboons, including Steven Mnuchin, Mick Mulvaney, Stephen Moore, Peter Navarro, and Larry Kudlow. Trump predicted that his massive tax cut would "trim the deficit." Instead, the deficit was back up to $1 trillion even before the coronavirus pandemic, proving once again that supply-side Republicans are actually dumber than chimpanzees. They never learn.