Worried About the Economy? Vote Democratic

Voters concerned about the economy should think twice before voting for Republicans.

Recent poll after recent poll shows that the economy, particularly inflation, is the number one issue for many voters. And, with the midterms just two weeks away, fears of a further economic downturn are fueling an apparent  Republican resurgence.

A New York Times/Siena College poll revealed that 44 percent of likely voters cited economic worries as the most critical issue for them, up from 36 percent in July and far higher than any other issue (concerns about gun violence, the overturning of Roe v. Wade, and threats to democracy have waned). Most troubling for Democratic candidates may be the numbers from the liberal Navigator tracking poll that reports a 20 point increase in just a month in the number of independent voters (a dwindling but still key constituency in tight races) worried about the economy.

There are a lot of caveats in analyzing these surveys. Polls are a snapshot in time of likely voter behavior. Two weeks can be an eternity in electoral politics, so what polls reveal today may not signal what voters will do on Election Day. (However, with so many Americans voting early, either by mail or in-person, there may not be much wiggle room for voters to change their minds.) The party out of power usually gains in the midterms during a president’s first term in office. Economic fears often benefit the party in the minority. And, pollsters may be underestimating the effect of voter enthusiasm on Democratic turnout.

Most of those caveats favor Republicans, a few may give comfort to Democrats. Still, there is no gainsaying that Republicans have the edge right now and with inflation at numbers higher than at any time in recent decades, the Republican advantage appears to be growing.

But, is voting Republican the smart choice for a voter worried about the economy? In one sense, voters who check Republicans on the ballot are buying a pig in a poke, since Senate Minority Leader Mitch McConnell decided late last year that Senate Republicans, at least, would not release a legislative agenda before the midterm elections. McConnell’s decree reflected an awareness that voters may not like individual parts of the GOP economic strategy and a recognition that skewering Democrats was good strategy.

In another sense, however, voters should be fully aware of what Republicans will do regarding the economy if they are in control of the levers of power. The Republican economic game plan has been fixed since Ronald Reagan’s presidency: Cut taxes on the wealthy on the assumption the very rich will invest the savings, spurring economic growth. This trickle-down (also called supply-side economics) theory of economic growth has been tried by all Republican presidents over the last 40 years. Does it work?

“The answer, while hardly a secret, is not nearly as widely known as it should be,” write two economists. “The U.S. economy performs much better when a Democrat is president than when a Republican is.” Most notably, the savings generated by cutting income taxes for the wealthy wind up not invested in ways that stimulate economic growth and job creation, but rather end up stashed in financial markets.

Since World War II, the gross domestic product has grown on average by 4.4 percent when Democrats occupied the White House, compared to 2.5 percent under Republican presidents. Private-sector job growth has averaged, over the same period, 2.5 percent under Democratic presidents, only one percent when Republicans resided at 1600 Pennsylvania Avenue.

Republicans frequently accuse Democrats of busting the budget thorough profligate spending. The facts indicate a different reality. The federal deficit — the difference between money the federal government takes in and the money it spends, as opposed to the debt, which is the total of accumulated deficits — balloons under Republicans, contracts under Democrats. President Ronald Reagan took the deficit from $70 billion to $175 billion. His successor, George H.W. Bush raised it to $300 billion, before Democratic President Bill Clinton — with a boost from Bush’s decision to raise taxes — cut it to zero. You read that right: The deficit was zero when Clinton left the White House.

The massive tax cuts and unfunded wars of George W. Bush exploded the deficit to $1.2 trillion, before Barack Obama halved it. The huge tax cuts enacted under President Donald Trump caused the deficit to skyrocket again, even before pandemic spending drove it still higher. Under President Joe Biden, the deficit has again been halved. Of course, burgeoning deficits caused by tax cuts have a political plus side for Republicans. It allows them to complain that there is no money in the federal till for social welfare programs favored by Democrats.

Low taxes on the super rich (who frequently pay even less than the legislated tax brackets due to a whopping number of tax breaks and dodges in the tax code) is a major cause of income inequality. The income share of the top one percent of Americans has climbed exponentially since the 1980s, closely correlating with the lowering of tax rates that have made the American tax system less progressive over the years. When tax rates at the top decline, the wealthy pay a smaller share of their expenditures in taxes, effectively transferring wealth from the vast majority of taxpayers to the rich ones.

Americans are right to be worried about the economy. But, they are wrong to use their fears as a reason to vote Republican. As the data show, the economy performs much better under Democrats.

Posted October 25, 2022