Friday, October 18, 2013

Jon Krajack — Guest Post: Obama a big spender? No way.


Obama, Big Government Spender??

According to the Heritage Foundation (a conservative think-tank), here is inflation-adjusted total U.S. government spending since 1993 in Billions of $$$ (with + or – from the previous year, and a * when government spending decreased from the previous year):

1992: $2,079

CLINTON
1993: $2,123 (+44 billion)
1994: $2,156 (+33 billion)
1995: $2,189 (+33 billion)
1996: $2,211 (+22 billion)
1997: $2,228 (+17 billion)
1998: $2,270 (+42 billion)
1999: $2,308 (+38 billion)
2000: $2,379 (+71 billion)

BUSH
2001: $2,420 (+41 billion)
2002: $2,570 (+150 billion)
2003: $2,705 (+135 billion)
2004: $2,801 (+96 billion)
2005: $2,924 (+123 billion)
2006: $3,038 (+114 billion)
2007: $3,032 (-6 billion)*
2008: $3,239 (+207 billion)

OBAMA
2009: $3,772 (+533 billion)
2010: $3,670 (-102 billion)*
2011: $3,746 (+76 billion)
2012: $3,611 (-135 billion)*
2013: $3,455 (-156 billion)*

Federal Spending by the Numbers, 2013: Government Spending Trends in Graphics, Tables, and Key Points Romina Boccia, Alison Acosta Fraser and Emily Goff

Ok. Let’s take note of some interesting things here:

Obama HAS NOT been a massive government spender. Of course his first year in office there was a huge spike in government spending because the economy was tanking… shedding hundreds of thousands of jobs per month. Both Bush and Obama enacted fiscal stimulus, which is part of the reason why the two biggest year to year jumps were 2007-2008 and 2008-2009.

What’s interesting though is that besides 2009, government spending has been decreasing more than it’s been increasing under Obama.

What about these $1 trillion+ budget deficits?  How could they be so large while government spending has not been increasing?

The budget deficit is a record of government spending relative to tax revenue. When the economy plummeted in 2008-2009, huge numbers of people were laid off work. When this happens, i.e. when less people are earning paychecks, tax revenue to the U.S. Government decreases. Make sense? But also, newly unemployed people apply for unemployment compensation and welfare and Medicaid etc., i.e. they need financial assistance. Make sense? The combination of these two things ~ less tax revenue + increased government spending on social safety nets ~ THAT is why the budget deficits are so high under Obama. This would have occurred no matter who became president because the social safety nets are “automatic stabilizers”…. They kick-in automatically when people lose their jobs. They STABILIZE the economic downturn. That’s what they are supposed to do (as well as not let people starve, etc.).

How can we get Obama to become that big government spender he's accused of being?

Jon Krajack

5 comments:

The Rombach Report said...

It's not just about the spending, but who is doing the spending (private sector or public sector) and what the spending is on. Public spending for consumption like food stamps for example may some people on the margin a fish but doesn't teach them how to fish. Better to transform urban vacant lots in cities like Detroit and Philly into sustainable local urban farms that feed and employ people.

Infrastructure projects that create real assets that produce a long term stream of returns, as opposed to bridges to nowhere, are a meaningful target for public/private partnership. Japan nearly paved over their whole country in public infrastructure projects during the 1990s but the return on investment was not so good. As I recall they built one of a largest suspension bridges in the world which only attracted a traffic flow of about 40 cars per day.

Tom Hickey said...

Easy to say, Ed, but the US has allowed its social problems and social dysfunction at both the top (corruption) and bottom (poverty) fester for a long time. Now it's become intractable and infrastructure spending doesn't address it. These problems have become structural, cemented in place through cultural conventions and institutional arrangements reflective of a low level of collective consciousness. Lots of reasons and lots of blame to go around, but the question is how to fix it, or at least ameliorate it before it sickens the society more.

mike norman said...

This article has been taken down. It's no longer there. Interesting.

Anyway, I'm not sure what these numbers are. The Treasury's own statement does not corroborate these numbers.

JK said...

Hey Mike…

The link works it's just that in this piece it's stuck to brackets (….)

http://www.heritage.org/research/reports/2013/08/federal-spending-by-the-numbers-2013

Heritage Foundation used CBO numbers.

How do they conflict with Treasury's own statement?

Tom Hickey said...

The link is fixed now. Sorry about that.