An interesting article by World Bank economist Richard J. Carroll, published on Bloomberg.com in June, summarizes his book-length study comparing the 12 U.S. presidents since World War II in terms of how well the economy did on their watch, using multiple measures.
The best economic improvement took place under Truman, Kennedy, and Johnson, and the worst under George H.W. Bush, Jimmy Carter, and George W. Bush. Clinton and Nixon are in the two middle positions, just above Reagan and Obama. (The sustained economic expansion under Clinton was the longest in U.S. history, but by other measures his performance wasn’t at the top.) On average, Democrats presided over much better economies than Republicans.
Under Truman, high tax rates on the rich and a booming economy produced surpluses averaging 2.4 percent of the budget. The national debt, which was 117.5 percent of GDP in 1945, was by 1953 just 71.4 percent. (Recall Ben Stein’s recent observations on that subject.) Though Carroll doesn’t mention it in the article, the ratio of debt to GDP was reduced (or in Ford’s case held steady) under every president Truman through Carter (who left office with debt just a third of GDP), then rose under Reagan and George H.W. Bush, fell under Clinton, and rose again under George W. Bush and Obama. At the end of Clinton’s second term the Congressional Budget Office was projecting that the national debt would be paid off entirely by now, but that was before George W. Bush took office and pushed through a big tax cut in 2001 and another in 2002, leading to a massive expansion of the debt.