Obama Administration is completely inept at countering out of control spending claims

Here is a chart that I constructed from the Treasury's own data that looks at Federal spending. It goes all the way back to 2001, which was the start of the Bush Administration.

As you can see, spending under George W. Bush went up every single year of his presidency, then spending peaked in 2009 and has been going down ever since.

Yet Obama has allowed Conservatives to dictate the national conversation on this and has labeled him an "out of control" spender when it is completely not true.

Let me be clear: I am not making a political statement here. I did not vote for Obama in the last two presidential elections. (In the last one I didn't even vote.) This is merely about the truth and it reflects the Obama Administration's utter ineptitude at getting the truth out.

Someone finally gets it!!!!!!!!!!!

Many of you may have already seen this on Warren Mosler's blog, but I just came across it and was floored at what the St. Louis Fed wrote in its report, Why Health Care Matters and the Current Debt Does Not.

As the sole manufacturer of dollars, whose debt is denominated in dollars, the U.S. government can never become insolvent, i.e., unable to pay its bills.6 In this sense, the government is not dependent on credit markets to remain operational. Moreover, there will always be a market for U.S. government debt at home because the U.S. government has the only means of creating risk-free dollar-denominated assets (by virtue of never facing insolvency and paying interest rates over the inflation rate, e.g., TIPS—Treasury Inflation-Protected Securities). Together with the unusually high, but manageable, level of the current debt, these facts imply that the current U.S. government can wait out any short-term economic developments until long-run growth is restored.7 Further, without an immediate need to drastically reduce the debt, the mechanism between high debt and slow growth loses most of its credibility.

It’s what we in the MMT community have been arguing for years! Looks like the word is finally starting to get out through “respected” mainstream channels. This is great news!!!

The myth of out of control government spending

The myth of runaway spending.

Many of you have probably already seen the chart I posted below, but I it's worth another look particularly in light of Mitt Romney's recent comments on "fiscal responsibility."

"The mission to restore America begins with getting our fiscal house in order. President Obama has put our nation on an unsustainable course. Spending is out of control. Yearly deficits are massive. And unless we curb Washington’s appetite for spending, the national debt will grow to the size of our entire economy this year."

The chart shows that spending is clearly not out of control. In fact, it is lower now as a percent of GDP than when Ronald Reagan was in office.  By the way, the Republicans had no problem with Reagan's "out of control" spending.

Look at how government spending collapsed under Clinton. We still haven't recovered from that. And the Clinton surpluses are considered to be so virtuous. It was totally the opposite.