Thread by @benwikler

Has the U.S. economy, historically, been better under Republican presidents or Democratic presidents?

A Republican financial analyst decided to find out.

His name? Bart Starr, Jr. (Yes, the son of THAT Bart Starr.)

The answer may surprise you.🧵

Before Bart Starr, Jr. takes over my thread, we have 18 days left until the election. This is go time. Your donations to @WisDems will help us get out the vote all across Wisconsin. Won’t you chip in now?:
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Who is Bart Starr, Jr.?

The son of legendary Packers QB Bart Starr, Bart Jr. grew up in Green Bay, WI.

He's an Alabama attorney, financial consultant, & a supporter of charities including @RawhideYouth.

A lifelong Republican, he voted for both Bushes, Dole, McCain, & Romney.

From here on, this is written by Bart Starr, Jr.
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There exists in much of America a belief, one our Republican family accepted for decades, that GOP presidents are better for the U.S. in terms of stock market performance, economic and job growth, and fiscal discipline/deficits.

Recently we accepted a challenge from a centrist economist to determine whether our bias was correct.

It turns out we were wildly mistaken.

Someone known to most Americans said, years ago, “It just seems the economy does better under the Democrats than the Republicans.” Before we identify him, let’s see if he was correct by analyzing long term data in order to avoid the distortion effects of 1 or 2 strange years.

From 1961 through 2024 (64 years), Republicans have held the presidency for 32 years, exactly the same number as Democrats (if we include 2024 as a full year).

Let’s look at the stock market performance from 1961-2024.

Assume we invested $10,000 in the stock market and allowed growth to compound only during Republican presidencies; our $10,000 would have done well, growing to approximately $105,000 during those 32 years.

If we did the exact same thing, but invested only during the 32 years of Democratic presidencies, we would have again done well… exceptionally well. Our $10,000 would have grown to approximately $570,000.

This equals a difference of close to 7% PER YEAR in favor of stock market performance during Democratic administrations.

In fairness, we should point out that one horrific year—2008—landed at the end of the George W. Bush administration.

Given the fact that a 37% drop in the S&P 500 Index resulted in a harsh impact on the Republican side of the ledger, let us run a hypothetical scenario, as follows: We will add 25% to the Republican data, AND deduct 25% from the Democratic data.

After making this adjustment to “share” the impact of 2008, growth under Republican presidents would have increased to $131,000; growth under Democrats would have increased to $427,000, still a significant difference: about 4% more PER YEAR in favor of the Democratic presidents.

Let’s move on from the stock market to economic and job growth.

In order to avoid upside bias from 1935-1944, as the economy recovered from the Great Depression and the buildup to WWll under FDR, we will begin our analysis in 1945.

The most important measure of economic performance is the real growth rate (nominal growth minus inflation).

Under the 40 years with GOP presidents, real GDP growth has averaged 2.4% per year.

Under the 40 years with Dem presidents, real GDP growth has averaged 3.5% per year.

A difference of 1.1% per year might not sound significant, but if you compound it over the course of a 40-year working career, it compounds to 50% more total growth.

Further, these data help explain something remarkable. EVERY transition from a Democratic to a Republican administration during the past 100 years has resulted in slower job growth, while EVERY transition from a GOP to a Democratic administration has led to faster job growth.

Now let’s look at deficits and debt.

Over the past seven decades, there have been three presidents who either reduced the size of the annualized federal deficits, or turned their inherited deficit into a surplus.

First, Republican Dwight Eisenhower. From January 1953 through January 1961, the federal budget deficit dropped by well over half.

Second, Democrat Bill Clinton. When he took office in January 1993, the annual deficit was close to $250 billion. By the time he departed in January 2001, the deficit had vanished; our country, in fact, had run a healthy surplus for four consecutive years.

Third, Democrat Barack Obama. Upon entering the White House in January 2009, the deficit was running at an annual rate of about $1.4 trillion. At the end of his eight years, in January 2017, the deficit had declined to approximately $600 billion.

Each of these three presidents achieved this progress via a combination of slightly higher tax revenues, primarily from large corporations and very high income earners, along with modest and restrained growth in aggregate federal spending.

Meanwhile, under Donald Trump, annualized deficits exploded by more than 50% from 2017-2019, BEFORE Covid.

This was almost entirely due to Trump’s tax cuts for large corporations and ultra-wealthy individuals like Elon Musk.

Trump’s proposal to repeat that policy means he will seek needed tax revenues elsewhere: enormous “across the board” tariffs—20% to 60%—that will hurt the middle class and hammer those who aspire to join the middle class.

This fact, along with the risk of a trade war that would harm our farmers & other exporters, led 16 Nobel-prize-winning economists, among 100s of experts, to unanimously declare Trump’s policies will lead to much slower growth & higher sustained inflation.
reuters.com/world/us/16-no…

A significant tax increase—in any form—on those struggling to make ends meet has, until this year, been rejected by Republicans.

Vice President Harris, by way of contrast, appears to be following in the footsteps of Presidents Eisenhower, Clinton, and Obama by suggesting modest tax increases on those making high levels of income, while offering tax credits to young families and budding entrepreneurs.

History demonstrates that this is the path to fiscal improvement. It significantly reduces the odds of a debt-driven crisis by preventing debt from growing faster than the economy, strengthens rather than degrades the solvency of Social Security, & reduces inflationary pressure.

Remember the quote earlier in this thread?

“It just seems the economy does better under the Democrats than the Republicans.”

The person who said this, many years ago, was Donald Trump.

A dispassionate review of 80 years of economic history makes clear that what Donald Trump said two decades ago was, in fact, correct.

If only the Donald Trump of today were to take a look at why.

The very policies Trump today abhors have in fact been far better for the millions of Americans who seek better growth, smaller deficits, avoidance of serious recessions, and his favorite, stock market appreciation.

These policies that have worked better in the past are today championed by Kamala Harris.

These data tell a compelling story, one even Republicans should study and embrace.

– Bart Starr, Jr.
October, 2024

Thank you, Bart Starr, Jr., for that illuminating analysis.

He’s not the only one saying it.

Here is a similar analysis from 2016 by the American Economic Review, a monthly peer-reviewed journal published by the American Economic Association.
pubs.aeaweb.org/doi/pdfplus/10…

And indeed, today, a majority of economists now predict that:

* growth would be higher under Harris than Trump
* inflation would be lower under Harris than Trump
* deficits would be lower under Harris than Trump

It’s clear that Trump’s proposals would raise taxes on most Americans, but cut them for the ultra-wealthy.

Harris would do the opposite: she’d reduce taxes for the middle class & working families and pay for it by making the wealthy pay their fair share.

https://x.com/JustinWolfers/status/1844435702752378972

Help get the word out about how Kamala Harris will improve the economy for the middle class, while Trump will hurt it.

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