This past week saw one of the most well-known economic indicators – Disposable Personal Income – come in about in line with expectations. With the year almost over, and another presidency about to hit the road, now seems like a good time to take a look at how Disposable Income has performed by presidency.
Before taking a look, which president would you guess saw the best performance in disposable income growth over their presidency? Which president would you guess is the worst?
Here’s a look.
Personal Income
Before looking at Disposable Personal Income, which takes Personal Income and subtracts out taxes, here’s a look at the broader Personal Income picture by U.S. president.
The chart shows the percentage change in Personal Income throughout the given president’s administration. The vertical axis is the percentage change on a cumulative basis. The horizontal axis is the number of months into the presidency. Each line represents a president.
Interestingly, the best president for Personal Income growth is Reagan. During his time in office, Personal Income expanded by an astounding 78%.
In distant second and third places are Clinton and Carter, each at 59% (although Clinton served four more years than Carter).
On the other end of the spectrum, Obama is the worst president for Personal Income, with a mere 29% growth for the 7 years he’s been in office.
George W. Bush was marginally better, with Personal Income growth of 38% over his 8 years. Bush had the unfortunate experience of being president when the housing market and the global financial crisis began. Most of the effect of the most recent global recession shows up in his final years.
Disposable Personal Income
Next, to the question at hand – Disposable Personal Income. Disposable Personal Income takes total Personal Income and subtracts off taxes paid.
Before looking, would you guess that the distribution or line-up of the best and worst U.S. presidents according to Disposable Income changes much from total Personal Income.
Which presidents raised taxes the most? Which presidents lowered taxes?
Interestingly, the race to the top gets much closer. Overall, Reagan still comes out on top, at 32.9%, followed closely by Clinton at 32.6%. In the Disposable Income view, Johnson gains ground, as does Bush II (W. Bush). Both presidents cut the tax burden during their time in office.
On the other end, the weakest president is Obama. Obama has both the broader Total Personal Income as incredibly weak under his watch and the fact that during his time in office he raised taxes by large amounts. The tax increases explain why Bush II looks much better than Obama.
Conclusion
Overall, in looking at Disposable Personal Income by U.S. president, some interesting results emerge. When it comes to Disposable Personal Income, the best performing U.S. presidents are Ronald Reagan and Bill Clinton. On the other end, the worst president for Disposable Personal Income is Obama, with DPI up just 13% through his 7 years in office.
Comments on this entry are closed.