How can political commentators, politicians and academics get away with statements like "Reagan budget deficits," "Clinton budget surplus," "Bush budget deficits" or "Obama's tax increases"? The only answer is that they, or the people who believe such statements, are ignorant, conniving or just plain stupid. Article I, Section 7 of the U.S. Constitution reads: "All bills for raising revenue shall originate in the House of Representatives; but the Senate may propose or concur with amendments as on other Bills." A president has no power to raise or lower taxes. He can propose tax measures or veto them but since Congress can ignore presidential proposals and override a presidential veto, it has the ultimate taxing power. The same principle applies to spending. A president cannot spend a dime that Congress does not first appropriate. As such, presidents cannot be held responsible for budget deficits or surpluses. That means that credit for a budget surplus or blame for budget deficits rests on the congressional majority at the time.
Thinking about today's massive deficits, we might ask: Where in the U.S. Constitution is Congress given the authority to do anything about the economy? Between 1787 and 1930, we have had both mild and severe economic downturns that have ranged from one to seven years. During that time there was no thought that Congress should enact New Deal legislation or stimulus packages along with massive corporate handouts. It took the Herbert Hoover and Franklin Roosevelt administrations to massively intervene in the economy. As a result, they turned what might have been a two or three-year sharp downturn into a 16-year depression that ended in 1946. How they accomplished that is covered very well in a book authored by Jim Powell titled "FDR's Folly." Here's my question: Were the presidents in office and congresses assembled from 1787 to 1930 ignorant of their constitutional authority to manage and save the economy?