Why Blue's Ahead Of Red

Truth Bears Fruit

Just a brief reminder that Democratic presidents tend to increase incomes among the poor and middle class, due to higher taxes on the rich.  This, in turn, makes for faster economic growth than under Republican presidents, who tend to do the opposite.

Why is this truth and not opinion?  Because it's easy to understand.  Compare these two uses for the same money:

  * A Republican tax break allows a rich person to buy a very expensive Christmas ornament to hang on their tree.
  * A Democratic tax credit helps five poor people buy things like a car, health insurance, or college tuition.

See?  The ornament produces the same GDP bang for the buck, initially, since buying it uses the same amount of money.  But after that?  Nothing.  It just hangs on the tree for a few weeks a year.  Meanwhile, there's add-on economic benefits if a car means getting to a better paying job, health insurance means staying at the job (and off medicaid), and a college education means access to that better job.  The better-suited job could mean leaving a lower level job for someone else; maybe even gaining enough experience to open one's own business.  And then there's future car-related maintenance, the productivity gained with the right person in the right job, and the additional benefits of a college experience--all economic pluses.

Though our example is something of an exaggeration (since the ornament really is an extreme case), it nevertheless gets at why Democratic policy bears fruit (Clinton's and Obama's economic upswings) and Republican prescriptions tend to end in recessions (Reagan/Bush in '83 and '91; Bush  in '08).

And is Blue generally ahead of Red?  Yes.  Check out the year-by-year chart here.  And note that the US economy did its best when taxes were generally higher on the wealthy ('50s, '60s) than when they were much lower ( '00s).
The top tax rate under various presidents:
Eisenhower: 92%-91%
Kennedy & Johnson: 91%
Nixon: 77% --> 71%
Ford & Carter: 70%
Reagan: 69.125%
Bush: 31%
Clinton: 39.6%
Bush & Obama: 35%