Reagan Beats Obama on Economic Growth
In September, an opinion piece at Forbes.com argued that "Obama Outperforms Reagan on Jobs, Growth And Investing":
"Economically, President Obama's administration has outperformed President Reagan's in all commonly watched categories. Simultaneously the current administration has reduced the deficit, which skyrocketed under Reagan. Additionally, Obama has reduced federal employment, which grew under Reagan (especially when including military personnel,) [sic] and truly delivered a 'smaller government.'"
The data says otherwise. To ensure we are on the same page, all data used herein comes either from the Federal Reserve Economic Data or the Office of Management and Budget databases.
We'll start with this bold, and incorrect statement: "Economically, President Obama's administration has outperformed President Reagan's in all commonly watched categories."
Here are the trends in real GDP, real per capita GDP, and real per capita disposable personal income -- all in seasonally adjusted 2009 chained dollars by quarter -- for Reagan versus Obama. Last I checked, these were "commonly watched categories" in economics.
Reagan's economic progress on these core indicators vastly outperforms that of Obama.
The next claim requiring debunking:
"Simultaneously the current administration has reduced the deficit, which skyrocketed under Reagan."
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Reduced the deficit? In 2008, the federal deficit was 3.1 percent of GDP. The OMB is projecting the 2014 deficit to be 3.7 percent of GDP. That is not a reduction. Similarly, the deficit in constant dollar terms has increased -- not decreased -- by $140 billion per year since 2008.
A smaller government under Obama compared to Reagan? In the year before Obama took office, federal outlays were 20.2 percent of GDP. They are current at 21.1 percent for 2014, and the OMB's estimate is for this to increase to 21.4 percent of GDP by 2016 -- meaning that Obama is on pace to preside over an increase in government outlays. Compare that to Reagan, whereby federal outlays declined from 21.1 percent of GDP in the last year of Carter's administration to 20.6 percent of GDP in Reagan's last year.
And according to the OMB, "total executive branch civilian full-time equivalent (FTE) employees" stayed exactly the same between 1981 and 1988 at 2,109,000 under Reagan, but have increased from 1,978,000 in 2009 to 2,100,000 in 2014 under Obama.
Try as the Obama administration supporters might to revise history, the facts remain the facts. Reagan's economic legacy is why we see headlines such as the following from last year:
"1980s Nostalgia: Poll Finds Reagan Beats Obama in a Landslide -- National Geographic finds even young people yearn for the 1980s."
People are looking backwards for a reason. The economy was better, the music was better, the movies were better. It was all better under Reagan, and kept getting better, which is why he won 49 of 50 states, 98 percent of the electoral vote, and nearly 59 percent of the popular vote in his re-election, up from 44 states, 51 percent of the popular vote, and 91 percent of the electoral vote in 1980.
Then there is Obama, whose popular vote share dropped from 53 to just 51 percent between 2008 and 2012, as did the number of states won (28 to 26) and the share of the electoral vote (68 to less than 62 percent). If life is so much better under Obama than Reagan, how do we explain Reagan's overwhelming re-election landslide compared to Obama's re-election decline?
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