Presidents in Deficit: Are there Historical Rewards to Deficits?

Abstract

Buchanan and Wagner (1977) pointed to an asymmetry in the political rewards of deficits and surpluses with the former being preferable to the latter. We test this claim by relying on the historical reputation surveys of American presidents. Historical reputations have long been something presidents have cared for and they constitute a reliable way to assess whether their reputations suffer or gain from having run deficits. We find evidence that the size of deficits tends to be associated with greater presidential scores.

Keywords: Presidents, Deficits, James Buchanan, Richard Wagner

JEL Classification: H11, H62