The Cleanup Crew: How Democrats Keep Inheriting America's Economic Crises

For over 40 years, Republican presidents have cut taxes for the wealthy, deregulated industries, and expanded military budgets, only for Democratic presidents to inherit the fallout.

Before the current cycle of boom, bust, and bailout took hold, American economic policy followed a remarkably stable and surprisingly bipartisan playbook.

From the depths of the Great Depression through the 1970s, both Democratic and Republican administrations operated within the bounds of Keynesian economics. Named for British economist John Maynard Keynes, this framework held that government wasn’t just a referee in the economy — it was a participant, a stabilizer, a builder.

It meant that during downturns, the federal government would spend boldly: on roads, schools, jobs, healthcare, and housing. It meant accepting progressive taxation as the price of a civilized society. And it meant that regulation of banks, monopolies, and labor markets wasn’t an enemy of growth, but its necessary guardrail.

This consensus built the America many now claim to want back, a nation with rising wages, strong unions, affordable college, expanding homeownership, and a sense of broad-based economic dignity.

It wasn’t just Democrats. Republican presidents, such as Eisenhower, invested in infrastructure, upheld high tax rates, and even warned about the power of the military-industrial complex. Nixon expanded environmental protections and launched the precursor to universal healthcare. There were ideological battles, of course, but the shared assumption was that government had a role to play in shaping a fair economy.

Then came Reagan.

His presidency wasn’t just a shift in policy. It was a rupture. Reagan declared that government wasn’t the solution, it was the problem. He slashed taxes on the wealthy, deregulated industries, and launched an all-out assault on organized labor. The economic consensus fractured, and with it, the very idea that public investment, worker protections, or collective responsibility were legitimate goals of governance.

What followed was more than just trickle-down economics. It was a decades-long shift in the Overton window, the range of policies considered politically acceptable. Even Democratic presidents who followed — Clinton, Obama, and Biden — found themselves constrained by this new reality. They could tinker and repair, but the foundation had shifted beneath them.

The fire was still burning, but now the cleanup crew was using paper towels to extinguish the flames.

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The First Loop: Reagan, Bush, and the Centrist Compromise

Ronald Reagan’s presidency reoriented the American political economy around a single idea: let the market rule. He cut the top marginal tax rate from 70% to 28%, gutted labor protections, and let deregulation surge through Wall Street, energy, and communications. At the same time, he exploded defense spending and tripled the national debt, a remarkable feat for a man elected on a message of fiscal restraint.

By the time George H. W. Bush took office in 1989, the consequences of Reaganomics were beginning to surface. Despite his campaign’s “read my lips: no new taxes” pledge, Bush was soon forced to do the unthinkable in Republican politics: raise taxes to close a Reagan-sized budget hole. The economy slid into recession. Public faith in conservative stewardship began to erode.

Enter Bill Clinton, the first Democrat elected after Reagan’s economic revolution, and the first to attempt governing within its ideological aftermath.

Clinton inherited a sluggish economy, rising inequality, and a deficit Republicans had both created and blamed him for. Determined to prove that Democrats could be fiscally responsible, he raised taxes on the wealthy and cut spending. Over the next eight years, the economy roared, powered in part by the tech boom, but also by Clinton’s strategic compromises. He balanced the budget. He produced a surplus. But he did it in ways that also cemented some of Reagan’s damage.

Welfare reform dismantled key supports for poor families. NAFTA weakened labor protections and led to the offshoring of manufacturing jobs. Most significantly, the 1999 repeal of Glass-Steagall, the firewall between commercial and investment banking, helped pave the way for the financial collapse a decade later.

In other words, Clinton succeeded in stabilizing the post-Reagan economy, but he did it by absorbing many of its underlying assumptions. The tools of government were back on the table, but in a smaller form. More apologetic. Less ambitious.

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The Fire Grows: Bush, Obama, Trump, and the Inheritance Trap

George W. Bush entered office in 2001 with a budget surplus and a relatively stable economy, one of the few modern presidents to do so. But that stability was quickly eroded. Massive tax cuts for the wealthy, deregulation, and two unfunded wars turned surpluses into deficits. In 2008, the bottom fell out. The housing bubble, inflated by reckless lending and weak financial oversight, collapsed, triggering a global financial crisis. What began as a domestic regulatory failure evolved into a worldwide economic catastrophe. Wall Street was saved. Millions of homeowners were not.

Barack Obama inherited this wreckage and moved swiftly to prevent a second Great Depression. He signed a massive stimulus package, bailed out the auto industry, and passed the Affordable Care Act. Despite these achievements, the political backlash was swift and brutal. The GOP weaponized the deficit, pushed austerity, and blocked further recovery efforts. Obama’s policies stopped the bleeding, but inequality deepened, foreclosures spiked, and the wounds never fully healed.

Then came Donald Trump, who inherited a stable recovery and chose to supercharge inequality instead. Corporate tax cuts, regulatory rollbacks, and attacks on public institutions defined his term. When the COVID-19 pandemic hit, it wasn’t deregulation that triggered the collapse but rather institutional fragility. Years of defunding public health, undermining science, and politicizing expertise left the U.S. vulnerable. A health crisis became an economic disaster not simply because of the virus, but because the system had been hollowed out. Pandemic relief was chaotic. Unemployment soared. The wealthiest Americans got richer. Everyone else waited for checks that barely arrived.

Joe Biden took office in 2021, inheriting the chaos. He moved swiftly, launching a national vaccination campaign, the American Rescue Plan, the largest infrastructure investment in decades, and a push for sweeping reforms through the Build Back Better framework. While many of his proposals were gutted or blocked by the courts or Congress, Biden nonetheless stabilized the economy, reduced child poverty, and restored a sense of functional governance.

Today’s Inferno

But in 2024, the cycle repeated itself. Donald Trump was reelected and inaugurated for a second term on January 20, 2025. Since returning to the office, Trump has launched a flurry of executive actions targeting the ACA, withdrawing from the WHO, banning DEI programs, and consolidating power in the executive branch. Immigration crackdowns have intensified. The climate rollback has accelerated. And in a stunning move, the Supreme Court limited federal judges’ ability to block executive overreach, granting the White House broader, unchecked authority.

Now, just months into Trump’s second term, the pattern is accelerating, and the One Big Beautiful Bill (OBBB) is its centerpiece. Promoted as a model of efficiency, OBBB actually adds up to $3.3 trillion to the deficit, with Republicans using accounting gimmicks like a “current-policy baseline” to mask the real costs. Federal spending has already surged by over $200 billion, primarily due to defense, enforcement, and debt service, despite claims to cut government spending. Meanwhile, the Department of Government Efficiency (DOGE) has fired over 250,000 federal employees, frozen grants, and sparked over 200 lawsuits. Essential services have stalled, and watchdogs warn that many of the so-called “savings” are either double-counted or entirely fictitious. The result is a federal government that’s spending more, doing less, and setting up yet another fiscal and functional crisis. It’s not a repeat of the pattern, but rather an escalation. The GOP sets the fire bigger and faster. Democrats, again, will be handed the mop.

Trump’s second term is not a return to Reaganomics — it’s something darker: post-democratic governance built on economic hierarchy, institutional weakening, and legal immunity.

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Breaking the Cycle: From Stabilizers to Builders

For more than forty years, Democratic presidents have entered office not to govern, but to rescue. Time and again, they’ve inherited broken economies, hollowed-out institutions, and a public desperate for stability. And time and again, they’ve delivered it, often imperfectly, often incompletely, but delivered nonetheless.

What they haven’t been given is the space to build.

There has never been a modern Democratic presidency that started from a place of economic strength and institutional trust. There has never been a moment when the left has governed without first having to clean up the wreckage left by conservative rule. The cycle has become so predictable it barely registers: tax cuts, deregulation, and disaster, followed by triage, compromise, and cautious optimism.

But stabilization is not transformation. Keeping the fire from spreading is not the same as rebuilding what was lost.

The deeper tragedy is that the longer this cycle continues, the more constrained each Democratic presidency becomes. Voters grow impatient, and ambitions shrink. The public forgets who lit the match, and the next crisis is always closer than we think.

If we are to truly break this pattern, then we must do more than just win elections. We have to reassert a different set of values. Public investment matters. Safety nets are not negotiable. Regulation isn’t the enemy of growth, but its guarantor. Government isn’t the problem, but the thing we share.

It means remembering history, naming who broke what, and refusing to mop up someone else’s fire with one hand while being told to cut the budget with the other.

Because the truth is, we didn’t start the fire.
But we sure as hell don’t have to keep cleaning it up alone.

Bibliography:

• “How Republicans Are Hiding $3.8 Trillion in Trump’s Megabill.” Barron’s, June 29, 2025.

• “Trump Megabill Would Expand Deficits by $2.4 Trillion, CBO Estimates.” The Wall Street Journal, June 27, 2025.

• “The Hidden Ways Trump, DOGE Are Shutting Down Parts of the U.S. Government.” The Washington Post, May 11, 2025.

• “Economic Policy of the Second Donald Trump Administration.” Wikipedia, last modified June 28, 2025.

• Krugman, Paul. The Conscience of a Liberal. New York: W. W. Norton & Company, 2007.

• Hacker, Jacob S., and Paul Pierson. Let Them Eat Tweets: How the Right Rules in an Age of Extreme Inequality. New York: Liveright Publishing, 2020.

• Phillips-Fein, Kim. Invisible Hands: The Businessmen's Crusade Against the New Deal. New York: W. W. Norton & Company, 2009.

• Blinder, Alan S. After the Music Stopped: The Financial Crisis, the Response, and the Work Ahead. New York: Penguin Press, 2013.