On the Myth of an Obama "Spending Surge"

[mykevermin]

http://krugman.blogs.nytimes.com/2010/10/16/the-non-surge-in-government-spending-continued/

The Non-Surge In Government Spending, Continued

A bit more on how government spending has not, contrary to what you hear everywhere, surged under Obama. Let me offer a calculation that will, I hope, make things a bit clearer. (Cue the usual suspects shouting that I’m lying).

So, what would we have expected total government spending — federal, state, and local — to do over the past three years if there had not been a crisis and a change in government control? A first approximation would have been spending growing along with the trend growth in the economy — that is, real GDP growing with the economy’s potential, and government spending growing at real GDP plus inflation.

Now, over the period 2000-2007 — from business cycle peak to business cycle peak — real GDP grew 2.4 percent a year. So a reasonable estimate for trend growth is 2.4 percent, or 7.3 percent since 2007.

We can use actual inflation: the GDP deflator rose 4.1 percent from 2007II to 2010II.

Put these together, and “normal” growth in government spending would have been 11.7 percent over the past three years.

Actual growth has been higher: 19.5 percent. So government spending is about 7 percent, or about $350 billion, higher than a simple trend projection would have suggested. What accounts for the higher spending?

Well, none of it is government consumption; it’s all in transfer payments. BEA data aren’t quite as helpful here as I’d like, but it’s clear that a large chunk, roughly $100 billion, is unemployment benefits, which have surged along with unemployment, and another large chunk is Medicaid spending, which has surged because the slump has impoverished more people. Some more for other safety net programs, like food stamps. Also, Social Security and Medicare outlays have gone up about $85 billion more than my 11.7 percent norm — medical cost growth, aging baby boomers, and maybe some people taking early retirement because they can’t find jobs.

And with that, you’ve basically explained the growth in government spending. No giant expansion of the welfare state — just business as usual in the face of a horrific slump.

 

[gargus]

Cool thing about stuff like that is anyone with a half a brain can explain that either way. A person can sit and make notations of a few numbers, say this, say that and make it sound like its fine. While another person can basically do the exact opposite and they both sound really smart, well informed and correct.

Bottom line is nobody really knows. All we get are projected graphs, pie charts, dumbed down explanations that dont really tell anyone anything, back peddling, distracting comments and alegations pointing to previous points in time and what was going on or talking about unrelated countries. None of it really is 100% fact, it just sounds like fact because the person spinning it is smart.

But the real bottom line is, does it matter? This country has already screwed its finances so hard it will take decades to repair the damage. Whats our deficit for 2010? Over 1 trillion? Well its like 1.249 trillion but why split hairs. At this points who cares if obama did or didnt throw away a billion dollars or whatever when your talking about a trillion dollars in national loss.

Besides lets be realistic. The man in least worse case scenario be out of office in 3 years or whatever. He will never have to work again, have secret service watching his ass the rest of his life and world wide fame and go down in history as the first black president. I dont think he paticullary cares much how much he spent of our countries money.

Besides to me time and energy would be better spent trying to fix the problem and not just defending or condeming people, that solves nothing.

 

[RedvsBlue]

 

[IRHari]

Anyone remember the definition of epistemic closure?

 

[mykevermin]

[quote name='gargus']Cool thing about stuff like that is anyone with a half a brain can explain that either way. A person can sit and make notations of a few numbers, say this, say that and make it sound like its fine. While another person can basically do the exact opposite and they both sound really smart, well informed and correct.

Bottom line is nobody really knows. All we get are projected graphs, pie charts, dumbed down explanations that dont really tell anyone anything, back peddling, distracting comments and alegations pointing to previous points in time and what was going on or talking about unrelated countries. None of it really is 100% fact, it just sounds like fact because the person spinning it is smart.

But the real bottom line is, does it matter? This country has already screwed its finances so hard it will take decades to repair the damage. Whats our deficit for 2010? Over 1 trillion? Well its like 1.249 trillion but why split hairs. At this points who cares if obama did or didnt throw away a billion dollars or whatever when your talking about a trillion dollars in national loss.

Besides lets be realistic. The man in least worse case scenario be out of office in 3 years or whatever. He will never have to work again, have secret service watching his ass the rest of his life and world wide fame and go down in history as the first black president. I dont think he paticullary cares much how much he spent of our countries money.

Besides to me time and energy would be better spent trying to fix the problem and not just defending or condeming people, that solves nothing.[/QUOTE]

You use a *lot* of word to say the simple, flippant, condescending conservative reaction: anyone can say anything they want with statistics.

Since you think this is true, I challenge you to find me someone who wrote the blog explaining the converse of Krugman's claims, using Bureau of Economic Analysis data. If your claim is true, rather than simply you putting your blinders up, it should be easy to find at least *one.*

Easy peasy. Are you up to the challenge?

 

[depascal22]

Numbers ain't so easy when you're the one that has to come up with them.

It's a good article but, as you can see, the right wing fan base is fired up. They will defeat the Dems this year and Obama in '12 on platforms of:

Taking Back Washington One Election at a Time
Lower Taxes
Bring Back the Constitution
Obama Spent Too Much of Your Hard Earned Cash on Secret Flights to Kenya

 

[mykevermin]

[quote name='depascal22']Numbers ain't so easy when you're the one that has to come up with them.

It's a good article but, as you can see, the right wing fan base is fired up. They will defeat the Dems this year and Obama in '12 on platforms of:

Taking Back Washington One Election at a Time
Lower Taxes
Bring Back the Constitution
Obama Spent Too Much of Your Hard Earned Cash on Secret Flights to Kenya[/QUOTE]

I missed the whole 'epistemic closure' discussion from April of this year, but had to look it up since IRHari mentioned it. Came across this column from conservative columnist Ross Douthat in which he says precisely what the problem with the modern Republican politicians is:

Conservative domestic policy would be in better shape if conservative magazines and conservative columnists were more willing to call out Republican politicians (and, to a lesser extent, conservative entertainers) for offering bromides instead of substance, and for pandering instead of grappling with real policy questions. This is part of why David Frum attracts so much attention, positive and negative: Not because his policy preferences are so far outside the conservative mainstream, but because he’s made it his business to hold various prominent right-wingers and Republicans accountable for being vacuous or inflammatory, instead of just training all his fire on liberals.

http://douthat.blogs.nytimes.com/2010/04/16/the-conservative-mind-circa-2010/

Of course, now that the Tea Party exploded in ways they hadn't necessarily in April of this year, he's backed off of his demands for substance a bit. But at least he gets it right some of the time, like Megan McCain.

 

[IRHari]

How will cutting spending create jobs? How will cutting taxes, gutting regulations, and cutting entitlements create jobs?

 

[wakawakawa]

That guy is so in the tank for Obama policies. He should just officially join the administration, then I could actually respect what he wrote. There's nothing wrong with defending your administration, but isn't he supposed to be part of the media?

 

[nasum]

They took our jobs!

Too soon?

I wonder what that there figure would look like without wasting our efforts on the sandbox of the world?

 

[evanft]

[quote name='wakawakawa']That guy is so in the tank for Obama policies. He should just officially join the administration, then I could actually respect what he wrote. There's nothing wrong with defending your administration, but isn't he supposed to be part of the media?[/QUOTE]

Wow, you sure did disprove everything he said with your own evidence.

Stop posting.

 

[wakawakawa]

[quote name='evanft']Wow, you sure did disprove everything he said with your own evidence.

Stop posting.[/QUOTE]

lol, thanks