Whichever presidential candidate proposes the highest deficit is more likely to win the election

In one of my key papers, I suggested that politicians can improve their electoral fortunes by proposing higher deficits, and even developed some formal models to show how this might happen.  The basic argument is that voters are subject to present bias, where they overweight events that happen right away and underweight events that happen far into the future.  If a politician wants to increase their popularity, they can propose tax cuts or new spending that increases the deficit in the short term, and imposes costs only in the long term when the deficits need to be closed later.  Voters would like the short run benefits a lot, and dislike the long term costs only a little, and once you start working on budget policy, you realize quite quickly that increasing the deficit is quite popular and decreasing the deficit is quite unpopular.

Now that we suspect that proposing higher deficits is going to help you win the election, the question then becomes, how much does it help.  My rule of thumb is that the politician that proposes the higher deficit wins about 75% of the time going back to the Great Depression. I generally assume Democrats propose higher deficits in every election from 1932 to 1976, and Republicans propose higher deficits in every election after 1976, except in 1992 when Clinton won and in 2012 when Obama won.  That means the presidential candidate proposing the higher deficit won in 16 of the 22 elections since 1932, where the candidate proposing a lower deficit won only when Eisenhower won his elections in 1952 and 1956, when Nixon won in 1968 and 1972, when Clinton won in 1996, and Obama won in 2008.  One striking thing to note is that over this entire history, the only time the same party won more than two presidential elections in a row occurred first when the Democrats became the high deficit party in 1932 (when they won 5 elections in a row) and then again when Republicans became the high deficit party in 1980 (when they won 3 elections in a row).

The next key question then becomes which presidential candidate is proposing the highest deficit in 2020.  It is hard to argue that Trump really is the low deficit candidate since he substantially increased the deficit when he passed his big tax cut in 2017 and again when passing the first pandemic relief bill.  In the latest stimulus negotiations, however, Democrats are the ones proposing much higher deficits (which I presume Biden supports), and Republicans are the ones trying to limit the amount of relief (which I presume Trump supports), so even though Trump worked very hard to be the high deficit candidate throughout his presidency, he is switching it up at the very end right before the election.  Because of this last minute role reversal, I would have to determine that Biden is the high deficit candidate now and has the edge in the next election because of it. Now we will just have to see which candidate actually wins the election in 2020 to see if this theory continues to hold true.  Polls suggest that Biden currently has a substantial edge going into the November election, so it looks like the theory might be accurate this time around too.