Friday, July 29, 2011

Truth about Federal Spending

Paul Krugman debunks the myth that federal spending has vastly increased under Obama.  He's done this about a dozen times before.

His argument is this, as a % of GDP, federal spending has indeed risen from 19.6% in 2007 to 23.8% in 2010.  About 1/3 of that change is from reduced GDP.  About half is a rise in safety net programs, because more people are in need or retired or past 65.  The remaining 1/6 is stimulus programs [which were deeply inadequate] which have now ended, and they were mainly money sent to states to temporarily somewhat maintain spending, not increase spending.

I believe Krugman is correct.  I am not aware of significant new federal programs, other then the temporary stimulus.  But it would be nice to see a clearer argument, such as breaking down the actual spending by dollars.  Here are some numbers provided by one commenter:

2002: $2.0 trillion
2003: $2.2 trillion
2004: $2.3 trillion
2005: $2.5 trillion
2006: $2.7 trillion
2007: $2.7 trillion
2008: $3.0 trillion
2009: $3.5 trillion
2010: $3.5 trillion
2011: $3.8 trillion (budgeted)

FY=Fiscal Year, FY 2008 began October 2007

These are nominal dollars (not adjusted for inflation):

FY 2008 (the last full FY under GWB): 3.0 trillion
FY 2009 (started under GWB): 3.5 trillion
FY 2010: 3.5 trillion
FY 2011: 3.8 trillion (budgeted)

The fairest comparison I can do with these data would be FY 2002-2003 for Bush, and 2010-2011 under Obama.  (Sorry there aren't many years).  In both cases, that starts with the first full fiscal year under each President.

2.2/2.0 = 1.1x increase for GWB
3.8/3.5 = 1.08x increase for Obama

The best comparison would start with 2001 and 2009, the previous fiscal years (largely set by previous president and congress).  Unfortunately, I can't do that comparison with these data, since 2001 was not provided.

I can easily pick years which make Bush look like far bigger spending increaser than Obama.

Anyway, even looking at these raw numbers, it appears that Krugman is correct.  There was a comparatively large jump from FY2008 to FY2009 of $0.5 trillion, but (1) that can't really be nailed on Obama, when he took office that FY was budgeted and 1/3 over, and (2) it includes the inadequate stimulus program, which should have been much bigger, as well as increased unemployment, social security, and medicare spending, which Obama had no control over.

1 comment:

  1. I have it all graphed out here.