Most Republicans and Democrats have a self-interested view of divided government.
They obviously prefer if their party controls everything. After all, that’s how Republicans got tax reform in 2017 and it’s how Democrats got Obamacare in 2010.
But they also like gridlock if that’s the only way of stopping the other party from wielding all the power.
Which is why Democrats liked gridlock after the 2018 election (they won the House of Representatives) and Republicans are going to like gridlock after the 2020 election (assuming they hold the Senate).
But what about those of us who want more economic liberty? Is gridlock good or bad?
As a matter of political economy, gridlock is good because it is harder for politicians to do anything when there’s divided government. Indeed, America’s Founders created a “separation of powers” system precisely because they wanted “checks and balances” to limit the power of politicians.
That’s the theory.
So how has it worked in practice?
First, we can look at international evidence by comparing the United States and Europe. We know two things.
- European nations have a larger burden of government spending than the United States and generally have lower levels of economic liberty when compared to America.
- European nations have parliamentary systems of government (the party that controls the legislature, by definition, controls the entire government), which means no checks and balances that can produce gridlock.
It’s certainly possible – or even quite likely – that those two points are interconnected. In other words, government has expanded faster in Europe precisely because there was no effective way of slowing or blocking statist legislation (and, as we know from the Second Theorem of Government, it’s difficult to take away goodies once voters get used to dependency).
Second, we can look at domestic evidence by comparing what’s happened in recent decades when there’s been gridlock in Washington.
Professor Steve Hanke crunched the numbers a couple of years ago. Here’s the chart he prepared showing that we got the most spending restraint (shaded in green) when there was divided government.
Steve’s data is persuasive, but I think it’s even more instructive to focus on the next column, which shows changes in non-defense spending.
By this measure, the only good results (i.e., a falling burden of spending) occurred during the Reagan and Clinton years. Since I did a video on exactly this issue, I concur that we got good results during their presidencies.
But notice that we now see very bad numbers when there was divided government during the Eisenhower and Nixon years. And the numbers for the first President Bush moved further in the wrong direction.
The bottom line is that divided government can be good, but it may actually produce the worst-possible results when you combine weak-on-spending Republican presidents with profligate Democratic Congresses.
P.S. There’s strong evidence that gridock following the 2010 election produced better results for the nation.
P.P.S. Here’s my more advanced breakdown of what happened to government spending for every president since LBJ.
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There are a few points here that are either missing or that need further examination:
1) Clinton, George W Bush and Obama had both divided and undivided governments within their terms in office.
2) Most of the spending increases under Bush the elder were in “mandatory” programs that have spending put on autopilot. Things like Social Security, Medicare, Medicaid and other similar programs. For example, in 1989 the Federal government spent $133 billion on healthcare, by 1992 it was spending $208 billion. In 1989 It spent $253 billion on pensions by 1992 it spent $314 billion. Welfare went from $83 billion to $137 billion. These three areas went from $469 billion to $659 billion in Bush’s four years, an 41% increase. When accounting for this, Bush was actually quite good at keeping other spending under control.
3) Gridlock can cut both ways. Certainly Clinton and Obama both had lower spending forced upon them by the Republican controlled Houses during their terms, but Reagan, Ford and Eisenhower all had higher spending forced upon them by Congress during their terms.
[…] Is Gridlock a Good Outcome? […]
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