In the latest Gallup poll on the most important problems facing the U.S. today, the third highest share of respondents identified the “economy in general” as their biggest concern, while the highest share said “coronavirus/diseases,” the ultimate source of our current economic troubles and high unemployment rate. Asked which political party would best handle America’s problems, 40 percent of those who identified an issue chose the Republican Party, compared with 44 percent in favor of Democrats.
Such results beg the central question of this WalletHub report: Would Americans place their trust in the right party when it comes to dealing with the economy?
In order to objectively answer that question, WalletHub’s analysts compared the state of the economy under six different scenarios in which either Democrats or Republicans control one branch of government or both the presidency and legislature. We then examined each scenario according to 13 key indicators of economic performance, ranging from “real gross domestic product (GDP) growth” to “poverty rate” to the “consumer and mortgage debt per capita.” In addition, we analyzed each metric under the administration of each president who served between 1950 and 2019 to determine which president had the most positive impact on the economy. Continue reading below for our findings, additional expert commentary and a full description of our methodology.
Main Findings
Presidential Metrics
President | S&P Annual Return | Real GDP Growth | Annual Unemployment Rate Change | Annual Poverty Rate Change (since 1960) | Gas Prices | Annual Uninsured Rate Change (since 1973) | Job Growth | Annual Median Income Change (since 1981) | Change in Annual National Debt as a % of GDP | Home Price Appreciation (since 1964) | Annual Trade Deficit/Surplus Change (since 1961) | Change in Annual Consumer & Mortgage Debt per Capita (since 1951 to 2018) | Income Inequality (since 1968) |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Dwight D. Eisenhower | 15.77% | 3.03% | 0.31% | N/A | -$0.01 | N/A | 0.83% | N/A | -2.12% | N/A | N/A | $593 | N/A |
| John F. Kennedy | 7.78% | 4.34% | 0.00% | -0.60% | -$0.04 | N/A | 2.14% | N/A | -1.70% | N/A | -$880,865,805 | $756 | N/A |
| Lyndon B. Johnson | 10.32% | 5.14% | -0.32% | -1.37% | -$0.01 | N/A | 3.40% | N/A | -1.83% | 3.83% | -$4,450,076,889 | $573 | N/A |
| Richard M. Nixon | -2.21% | 3.50% | 0.26% | -0.34% | -$0.04 | N/A | 2.18% | N/A | -1.30% | 0.98% | $1,820,732,130 | $726 | 0.12 |
| Gerald Ford | 2.98% | 1.55% | 0.93% | 0.23% | $0.12 | -0.87% | 0.95% | N/A | 0.29% | 2.05% | -$12,755,756,513 | $59 | -0.19 |
| Jimmy Carter | 2.72% | 3.27% | -0.15% | 0.30% | $0.26 | -0.53% | 2.92% | N/A | -0.44% | 0.41% | -$8,221,453,932 | $605 | 0.09 |
| Ronald Reagan | 9.88% | 3.48% | -0.20% | 0.00% | -$0.18 | 0.38% | 1.92% | $533 | 2.23% | 2.55% | -$23,421,835,003 | $1,198 | 0.39 |
| George Bush | 12.16% | 2.24% | 0.50% | 0.45% | $0.04 | 0.45% | 0.48% | -$463 | 2.93% | -2.27% | $44,033,681,967 | -$26 | 0.18 |
| Bill Clinton | 15.46% | 3.88% | -0.44% | -0.44% | $0.04 | 0.00% | 2.25% | $955 | -0.81% | 1.58% | -$59,675,267,393 | $1,223 | 0.62 |
| George W. Bush | -3.51% | 2.19% | 0.23% | 0.24% | $0.21 | 0.00% | 0.13% | -$329 | 1.62% | 1.34% | -$37,126,257,828 | $3,014 | 0.05 |
| Barack Obama | 13.32% | 1.62% | -0.11% | -0.06% | -$0.20 | -0.80% | 0.94% | $378 | 4.55% | 2.28% | $41,665,348,034 | -$923 | 0.46 |
| Donald J. Trump | 14.07% | 2.50% | -0.40% | -0.73% | $0.14 | 0.57% | 1.35% | $1,935 | 0.51% | -0.62% | -$21,440,940,701 | $928 | 0.18 |
Note: President Harry S. Truman was excluded from the analysis, as both his first and second terms (1945–1949 and 1949–1953, respectively) began prior to 1950.
Ask the Experts
For more insight, we relayed our findings to a panel of political-science, political-economy and macroeconomics experts and asked them to reflect on the results. Click on the panelists’ profiles to read their bios and thoughts on the following key questions:
- Why do you think that the S&P 500 grew more under Democratic presidents paired with a Republican Congress, whereas GDP grew more under Democratic presidents paired with a Democratic Congress?
- Do you think Joe Biden or Donald Trump has the best plan to promote future economic growth?
- Do you believe the federal government is getting worse or getting better at promoting economic growth regardless of party control? Why?
- In your opinion, will Joe Biden or Donald Trump be better for the economy?
- In your opinion, who was the best president in the post war period?
Ask the Experts
- Robert E. Wright
Paul Coverdell Distinguished Visiting Fellow of Policy Studies, Fall 2020 – Georgia College and State University
Read More
- Gabriele Camera
Professor, Economic Science Institute, The George L. Argyros School of Business and Economics – Chapman University
Read More
- David J. Kuenzel
Assistant Professor of Economics – Wesleyan University
Read More
- Shantanu Bagchi
Associate Professor, Department of Economics – Towson University
Read More
- Marie Christine Duggan
Ph.D. – Economics, Keene State College, New Hampshire
Read More
- Jeffery S. Heinrich
Associate Professor, Department of Economics – University of Wisconsin – Whitewater
Read More
Detailed Findings
S&P 500 Annual Return
S&P 500 Annual Return (Adjusted by Inflation)
Real GDP Growth
Real GDP Growth (Chained 2012 Dollars)
Annual Unemployment Rate Change
Annual Unemployment Rate Change
Annual Poverty Rate Change
Annual Poverty Rate Change (Since 1960)
Gas Prices
Gas Prices
Note: Prices used were for regular leaded gasoline until 1990 and for regular unleaded gasoline thereafter.
Annual Uninsured Rate Change
Annual Uninsured Rate Change (Since 1973)
Note: Uninsured rate calculated for non-elderly (aged 64 and younger) population.
Job Growth
Job Growth
Median Income
Annual Median Income Change (Since 1981)
Change in National Debt as a Percentage of GDP
Change in Annual National Debt as a % of GDP
Home Price Appreciation
Home Price Appreciation (Since 1964)
Annual Trade Deficit/Surplus Change
Annual Trade Deficit/Surplus Change ($ Billions; Since 1961)
Change in Annual Consumer & Mortgage Debt per Capita
Change in Annual Consumer & Mortgage Debt per Capita (Since 1951 to 2018)
Income Inequality
Income Inequality (Top 5% vs. Lowest 20%; Since 1968)
Methodology
In order to objectively answer the question “Which political party’s control is more suitable for national economic growth and stability?” WalletHub’s analysts compared the state of the economy during Democratic and Republican years spanning from 1950 to 2019 (except where otherwise noted):
- Democratic Presidency & Divided Congress: 4 out of 70 years (6 percent)
- Democratic Presidency & Democratic Congress: 19 out of 70 years (27 percent)
- Democratic Presidency & Republican Congress: 8 out of 70 years (11 percent)
- Republican Presidency & Divided Congress: 9 out of 70 years (13 percent)
- Republican Presidency & Democratic Congress: 22 out of 70 years (31 percent)
- Republican Presidency & Republican Congress: 8 out of 70 years (11 percent)
Each period was evaluated according to 13 key indicators of economic performance, which are listed below. They range from “Real GDP Growth” to “Change in Annual National Debt as a Percentage of GDP.”
In order to facilitate comparison, we converted all dollar values to 2019 terms, with the exception of real GDP, which was calculated by the U.S. Bureau of Economic Analysis in “chained 2012 dollars” and annual gas prices, which were calculated by the Office of Energy Efficiency & Renewable Energy in “constant 2016 dollars”. In addition, S&P 500 annual growth was adjusted by each given year’s inflation rate.
- S&P 500 Annual Return (Adjusted for Inflation Rate): Full Weight
- Real GDP Growth (Chained 2012 Dollars): Full Weight
- Annual Unemployment Rate Change: Full Weight
- Annual Poverty Rate Change (Since 1960): Full Weight
Note: This metric measures the poverty rate for all individuals. - Gas Prices: Full Weight
Note: Prices used were for regular leaded gasoline until 1990 and for regular unleaded gasoline thereafter and were calculated by the Office of Energy Efficiency & Renewable Energy in “constant 2016 dollars.” - Annual Uninsured Rate Change (Since 1973): Full Weight
Note: This metric was calculated for the non-elderly population (aged 64 and younger). - Job Growth: Full Weight
Note: This metric was calculated based on total non-farm jobs. - Annual Median Income Change (Since 1981): Full Weight
- Change in Annual National Debt as a Percentage of GDP: Full Weight
- Home Price Appreciation (Since 1964): Full Weight
Note: This metric measures the yearly change in the median sale price of a house and land (adjusted by the Consumer Price Index) since 1964. - Annual Trade Deficit/Surplus Change (Since 1961): Full Weight
Note: This metric was calculated as the difference between total exports and total imports. - Change in Annual Consumer & Mortgage Debt per Capita (Since 1951 to 2018): Full Weight
- Income Inequality (Since 1968): Full Weight
Note: This metric was calculated as the ratio between the top 5 percent mean household income and the lowest 20 percent mean household income.
Sources: Data used to create this report were collected from the Bureau of Economic Analysis, the Leonard N. Stern School of Business, the U.S. Bureau of Labor Statistics, the U.S. Census Bureau, Office of Energy Efficiency & Renewable Energy, Centers for Disease Control and Prevention, and Federal Reserve Bank of St. Louis.