Friday, November 22, 2019

How Does Trump Compare to Previous Presidents - Update 1

I published my first evaluation of Trump's performance on 9/6/2018, using Federal Budget and Financial Market data. This previous analysis used only one year of actuals for Trump and 6 years of forecasted results from the Office of Management and Budget.  This update has 3 years of actual data and only one forecasted year to make up his first term.  My experience has been the next year forecast is very good as most policy spending is already set.

As a refresher on my approach, I have covered the years from 1961 (Kennedy/Johnson) to the present.  For these years,  I downloaded the entire budget detail from the "Office of Management and Budget".  These data were analyzed using statistical techniques to establish the Annual Compound Growth Rate (CAGR) for each presidential term.  There has been one four year term for each political party (Carter, Bush1) and I have calculated Trump's CAGR using the 2020 Federal Budget publication but this time using only the years 2107 to 2020 to represent Trump's first  4 year term.

To compare each of the 9 Presidential Terms, I have focused on GDP, Budget Receipts (3 categories), Budget Outlays, Deficit, Supplemental Spending, and National Debt.  I have also added the growth of the Dow Jones Industrial Average as an additional  economic indicator which Trump uses frequently.  Since the United States is growing and spending is likewise growing exponentially, the use of Compounded Annual Growth Rates makes for equitable comparisons between Presidents.  A summary of these findings can be seen in the table below:


Looking at the individual categories above, Trump is NOT the best in any category!  When evaluating the economy, GDP is usually at the top of the list and Trump is below the Republican and Democratic averages on GDP growth and below the Republican average on Real GDP.  Trump's tax plan shows up in Corporate Income Taxes, shrinking at -3.9% compounded annually, resulting in Receipt growth at only 3.2%, the lowest of all Presidents. Spending growth is twice that of Receipts at 6.4% which is mid range among all 9 Presidents. To summarize, Trump is on the "bad" side of the Republican average on 7 of 11 categories.  He is on the "bad" side of the Democratic average on 11 of 11 categories.

I also launched an analysis to confirm (or disprove) the many comments from the Trump Administration concerning Trump's superior performance relative to previous Presidents. The scoring is based on assigning 2 points for best performance in a category and 1 point for second best.  Also, -2 points for worst performance in a category and -1 point for second worst.  Good performance is considered high growth in Receipts, GDP and Stock Market; poor performance is high growth in Spending and Deficit/Debt (traditional Republican principles).  Here are some top line findings: combining Presidential performance on the growth rates across all financial results: Trump is now alone at SECOND TO LAST place among all 9 Presidents. Bettering Trump are Nixon/Ford, Reagan, Bush 2, Obama, Carter, Kennedy/Johnson and Clinton.  Bush 1 has the lowest score of all Presidents and Clinton had the highest.

One of the sub-categories of "Outlays" or spending is Total Net Interest on the Federal Debt which is shown below:

The green, white and red sections around the data are statistical limits which are helpful in determining if all of the data fall within a "normal" range which helps identify "outliers".  If there are no outliers, the annual compound growth rate is determined.  It can be found in the data box, just above the blue highlighted number.

In this case the Trump's growth of the Interest on the Debt is 22.1% compounded annually.  This is 3 times higher than the other 8 President's combined average of 7.3%!  As you can see the slope of line is quite a bit steeper, reflecting the higher debt growth and higher interest rates that are likely to increase with such high national debt.  This has not been much discussed in the press but is a natural outcome of Trump's tax plan.  One more item in the news is the Trade War and its affect on the our economy.  Although it is already reflected in the GDP and Receipts above, I took a look at the Trade Deficit and Trump is running at a Compound Annual Growth Rate of 9.4% as compared to Obama at 1.7%!  Enough Said!!

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