Why do people think the Republicans do well with the domestic economy?

Proof is in the result. Since Hoover, Republicans have guided rather lackluster economic results, one major depression, and a score of painful recessions. Starting with Regan and continuing with Bush I, and now Bush II, Republicans have been terrible stewards of the public coffers due to gigantic deficit spends. The only democrat that had a bad economy in the past 60 years was Carter--Roosevelt brought back the economy wrecked by Hoover; Truman, Kennedy, Johnson, and Clinton all maintained boom years.