Reagan and Carter, Again

by Ramesh Ponnuru

Nick Gillespie defends his claim, criticized here yesterday, that Carter was thriftier than Reagan, just as Senator Rand Paul has said. I don’t think this dispute has anything like the importance Gillespie attaches to it (he argues that recognizing Carter’s greater thrift is key to shrinking the government), but his follow-up does help me understand his position a little better.

He uses three measures to describe Carter as thriftier. Spending was lower, spending as a percentage of GDP was lower, and deficits were lower under the 39th president than the 40th. The logical implication of Gillespie’s last measure is that a president is “thriftier” when he raises taxes. I don’t think that’s what Senator Paul had in mind, although if he did it would be interesting to hear his case. I also don’t think it’s the way most people, and especially most conservatives and libertarians, understand thrift in government.

I argued that we should use the annual rate of spending increase as our measure, in which case Reagan was more restrained than Carter. Gillespie’s first two measures–spending levels and spending as a percent of GDP–are attractive because they’re more ideologically ambitious. To score well on them you can’t just restrain the growth of spending but have to cut it. But it’s also a standard that requires us to take absolutely no account of the situation greeting incoming presidents, and it leads to somewhat perverse results. If we use the percentage of GDP standard, for example, then it’s not just Carter who comes ahead of Reagan. George W. Bush does better too, even though Gillespie describes him as a big-government monster. Kennedy and Johnson do better than any of these three. And by the spending-level metric, every modern president does worse than the one before him. That tells us something, to be sure, but it’s something of limited usefulness.

It seems to me that the most natural standard to use is how fast spending increased under each president. And I think it seems that way to Gillespie too. The first piece of evidence his original article cited to make the case for Carter over Reagan was that spending increased by a lower percentage in the first presidency than the second. Only after realizing that taking an annual average for this increase invalidated his argument–by showing that spending increased at a much slower rate under Reagan than under Carter–did Gillespie decide that the rate of increase is not so important after all. I think he had the right general idea the first time, even if not quite the right numbers.