A Quick Look at Federal Spending
Over at Plain Blog, an anonymous wing nut made this off-topic comment.
Now, yes, Bill Clinton and his 2000 federal spending level of 18% of GDP doesn’t put him on the fringe, which makes it surprising that you lefties are celebrating him, even as you hysterically condemn anybody who resists the Left’s current massive spending levels, which are nearly 50% greater than Clinton’s and are spending the nation into debt obvlivion.
This once again raises the regressive canard that Obama has been a profligate and fiscally irresponsible spender.
Let’s have a look.
Here is a graph of current expenditures that took place in the years of the current century.
First observation is that anon’s math isn’t very good. Current expenditures are roughly 100% greater than when Clinton left office, not a mere 50%.
Second observation is that the vast majority of that increase – from about $1900 billion to about $3200 billion – took place under the previous administration.
Third observation is that the bulk of the Obama increase occurred during the recession – as it should – from a bit under $3200 billion to a bit under $3600 billion. Since then it’s crept up to about $3800 billion, and has recently flat-lined.
A more subtle point is that spending, like many time series data sets, increases exponentially over time, following population growth. So, saying that a value at time B is some percentage greater than the value at time A communicates essentially zero information. Context matters.
Let’s look at expenditures in terms of year over year increase.
Yep, there was a big increase in 2009 and 2010, as social safety net programs kicked in.
Since then, expenditure growth fell precipitously and now has actually gone negative. The last time that happened was in the Eisenhower administration. Clearly, Obama has not been profligate. Would it be an exaggeration to say he’s been miserly?
Bill Clinton did a great job of exposing Republican lies in his speech at the Democratic convention last night. But really, it’s easy. All you have to do to refute a regressive is have a quick look at facts and data.
Cross-posted at Retirement Blues.
earlier this week, at Forbes:
obama is the tightest government spender since eisenhower
jazz
unfortunately it is not quite that easy. after you have got the facts you have to get the voters to listen to them, understand them, and care about them.
if they want to believe Obama is the n word islamic devil they will find a way to believe the numbers they want to believe.
me, i believe Obama is part of the ongoing conspiracy to make Wall Street the real rulers of America. not that they haven’t been for a long time. but they are getting impatient with having to pretend that they are not.
If Obama would credibly promise to get spending down to 18% of GDP, he’d garner a lot more support and a lot more buy-in from the people for whom he’s proposing tax increases. But considering the cries of “against clean air, untoxic food, and safe medicines” that come when fiscal hawks recommend slowing the rate of growth of spending, the “credible” part of that promise is left wanting.
And in constant dollars, spending is 53% higher in 2011 than in 2000 per the OMB
http://www.whitehouse.gov/omb/budget/Historicals
but spending is the only way for the economy to grow…
GDP = personal spending + investment spending + government spending + foreign spending (net exports)
so if the people arent spending, businesses arent spending, and we’re importing more than we’re exporting, spending by government (ie, a currency issuer that can spend when others cant) is the only way we can accelerate out of this weak recovery…
rjs –
Wow. Forbes. That’s a hoot.
Dale –
I was talking about refutation, not convincing anyone. Anon, back at Plain Blog demonstrates the classic immunity to facts and data that is distressingly typical of the right, and a big smarter-than-thou attitude to go with it. You simply cannot penetrate the bubble.
In ’08, Big Finance supported Obama. Haven’t they largely abandoned him this time? That casts some doubt on your conspiracy thesis.
m jed –
If Obama would credibly promise to get spending down to 18% of GDP, etc
Look – the rate of spending growth is currently NEGATIVE. What more do you want?
spending is 53% higher
I’ll repeat myself. “So, saying that a value at time B is some percentage greater than the value at time A communicates essentially zero information. Context matters.”
When you think of increases, think of Bush.
Or are you inside the bubble, too?
Cheers!
JzB
“So, saying that a value at time B is some percentage greater than the value at time A communicates essentially zero information.”
You can repeat yourself all you want, but this statement isn’t true when discussing spending in *real* terms, which is what I said.
And I completely agree that Bush was terrible on spending. But he took spending as % of GDP up 2.5% over the course of his tenure and right now, we’re up another 3.3% from there depite being out of Iraq for the past two years.
m jed
Here is Federal spending in constant 2005 dollars, as a percent increase over the Yr 2000 value, data from Table 1.3 of your link.
Yr % increase over 2000
2000 0.0%
2001 1.6%
2002 7.9%
2003 12.9%
2004 16.5%
2005 21.2%
2006 25.7%
2007 25.7%
2008 32.5%
2009 55.6%
2010 51.0%
2011 53.3%
Remember, the 2009 budget was set in 2008, and belongs to Bush.
Please tell me what your point is.
Cheers!
JzB
m jed
You are suffering from the denominator effect.
Here is a relevant graph for you to ponder. Like Bubba Billy said – it’s arithmetic.
http://research.stlouisfed.org/fredgraph.png?g=ahw
What is the reason for looking at a ratio? Ponder that as well.
Cheers!
JzB
Jazz:
Would it help to explain what became part of the budget which was not included (off budget) in the Bush numeric?
run –
Probably not, though that is worth pursuing in it’s own right.
This was intended to be a quick hit, but I might have to do a follow up or two — IF I have the time and he energy. Both highly doubtful at this point.
Cheers!
JzB
jed
if the only that mattered was the percent of government spending per GDP you might have a point.
but, you know, things happen, and as gordon gecko would have said “Spending is good.”
You might contemplate this… while government spending as a percent of GDP is twice what it was before FDR, your income is ten times as large as it was before FDR… all in real dollars.
and, you know, in some places kids aren’t growing up eating lead paint. so i feel my tax dollars aren’t entirely wasted. especially since i have so much more left over after taxes than i used to.
Jazz
i’ll give up my conspiracy theory when Obama fires his wall street advisors and stops trying to kill Social Security.
unlike most paranoid conspiracy theorists i don’t NEED to believe mine. but, you know, the idea that wall street rules washington has been around for a long, long time. and seems to have some evidence to support it.
what’s “new” about Obama, I guess is that for a Democrat he is too obvious about it.
Dale –
Big Finance has way too big an influence in every aspect of American culture, and most notably politics. No argument there.
But Paul Ryan – in a rare moment of lucid candor – said that this election provides a stark choice.
I don’t agree that BHO is trying to kill SS. The Rethugs absolutely are, and Medicare, education, and science along with it.
Even after watching his speech, I’m not a huge BHO fan. But a Rethug victory in this election will be destructive to everything you hold dear, and a total disaster for America. A victory for Obama will not.
That might be faint praise, but it is the reality we face.
JzB
JzB
Your original post said that the person you cite was way off on his claim of 50%, so my point was simply that it wasn’t.
Second, claiming that Bush is completely responsible for 2009 outlays is misleading. ARRA was not in the Bush F2009 budget but was in F2009 outlays (shovel-ready projects and all that), the bailout of the auto companies was not supposed to be allowed according to the letter of TARP legislation and was a F2009 expenditure, AIG’s bailout was restructured after TARP and after the 2008 election, and then further restructured in March 2009 to the detriment of taxpayers, the latter of which Bush clearly had nothing to do with. Fannie and Freddie had additional draws on Treasury from an outlay perspective in 2009 that were not in the Bush budget.
As for looking at spending as a ratio of GDP – I’ve often asked the same question from the other perspective, which is why does spending need to grow at the rate of nominal GDP – where’s the operating leverage and benefit from scale that government is supposed to provide because they’ve got such purchasing power? But the retort is always that spending needs to keep up with GDP just ’cause. Which is why starve the beast seems to be the only weapon fiscal hawks have been able to wield with any level of success.
Jed
why wouldn’t you think that government has to grow FASTER than GDP because as the country gets bigger it gets more complex. I think this may actually be a general rule of “growth.” Things get bigger until they are too complex to function. Maybe that’s the real story of the fall of empires. I don’t know, but you seem to have a simple answer for everything… one that completely ignores any concept of cause and effect. All you “hawks” seem to be able to “think” about is the size of your tax bill… even as you are actually getting richer and richer “after taxes.”
try to think: a country is not a factory where economies of scale make sense. a country is a complex organism where bigger means “even more complex. even more need for government to clean up the damage of “free competition.”
What if some evil English teacher made the students diagram that sentence?
On Jan 7, 2009, the CBO estimated the deficit to be 1.2 trillion. The actual was 1.4 trillion.
Estimates are estimates, but lets take it as the reality, X Obama.
Then we can attribute 200 billion of him. That’s out of over 3.5 trillion in expenditures.
So I will gladly allocate 6% of the 2009 deficit to the miser B. Hoover Obama.
Never mind that (again table 1.3 of your link) receipts for 2009 were down 389 billion from 2008.
BTW – GDP was down 300 billion. Put that in your denominator.
Cheers!
JzB
JzB
Anonymous
if the “English teacher…diagram sentence” comment was directed to me, you’ll have to help me out a little.
could you understand the sentence?
i sometimes write very poorly indeed and would be glad of any feedback that is a little more precise than your comment.
ha!
coberly, i also had to check what i wrote to see if that was directed at me…
The Democratic platform names substantial infrastructure improvement as a priority, calling for up-front public investment in roads and bridges and doing so as part of an effort to create jobs. Republicans called for a federal-state-private partnership for infrastructure improvements, and noted that federal deficits require lawmakers to make hard choices, including on the issue of infrastructure spending – indicating that this type of spending does not rank as highly on Republicans’ priority list as it does for Democrats. There was, however, a logical inconsitency in the Democrats’ plan to fund infrastructure improvements. While one part the platform notes that wars in Iraq and Afghanistan had been paid for “on a credit card,” the document later suggests that part of the “savings” from ending the war in Afghanistan should be used to fund infrastructure. There’s a logical gap there; if the war was paid for on credit, then what savings are generated by the war’s end?
Amanda working for SpeedyLoanSearch.com