Yes, The Right Wing Lies When They Say Obama is a Profligate Spender
Part III – How to think about time series data.
Part II Federal Spending as a Fraction of GDP
Part I Federal Spending Growth
Some commentors to the previous posts have rightly concluded that I consider spending under Obama in the context of historical trends. In fact, if you don’t consider historical trends, you are ignoring the most important element of context that is available. I only mentioned trends briefly in Part II, but the directional changes in the graphs of Parts I and II implicitly suggest them.
Time series data that relate to the size of the population, the government, or the economy generally follow a quasi-exponential growth pattern. I say quasi- because a perfect exponential growth pattern results from a continuous constant rate of growth, while real world growth rates vary from year. Graph 3 of Part II shows how these variations have occurred over several decades. Usually this does not result in a large or permanent deformation in the shape of a quasi-exponential curve, since the growth rate typically oscillates irregularly around a mean value that only changes slowly over time.
Graph 2 in Part II shows that the spending and GDP growth curves stay close to exponential tracks over long time spans. It also illustrates that the recent recession was one of those rare times when growth rates deviated substantially.
Human eye-brain coordination doesn’t deal well with exponential curve shapes. Straight lines are much easier to comprehend and extrapolate. Graphing quasi-exponential data on a log scale reduces the curve to a quasi-straight line that is much easier to use and understand.
Graph 1 shows Federal Spending and GDP, since 1995, plotted on a log scale. Constant growth results in a straight line segment, and a higher growth rate causes a steeper slope. Zero growth shows up as a horizontal line. I’ve again included a line for 5 times spending, to get a close overlay with the GDP line.
There is an upward bend in the spending line in 2000. This is most easily seen in the blue line. During the 90’s, we can see that GDP grew faster than spending. In 2001-2, GDP growth flat-lined, as expected during a recession. Then, from 20002 to 2008, the growth rates for GDP and spending were close to identical. Both lines twist during the most recent recession. Curiously, spending growth was flat for a large portion of 2008.
Since the recession, the spending lines are very close to flat, and GDP growth has been anemic. Here is a close up.
Graph 3 provides context, all the way back to 1947. Ponder the inflection points and slope changes at your leisure.
Note that there are only two flat-ish spots in the spending lines: now, and during the Eisenhower administration. The current administration has, at least temporarily, broken the decades-long trend in continuous spending increases.
To emphasize the obvious, spending growth is now very close to zero. In context, this is remarkable. Saying Obama is a profligate spender is a lie.
In this post, I am not suggesting that the rate of spending growth under any president is good, bad, appropriate or inappropriate. I am only pointing out what was and is.
So, this is how you think about time series data.
0) Forget your preconceived notions. (Frex:I had no idea that spending growth has essentially stopped until I looked at the data.)
1) Identify trends. The history of time series data provides meaningful context.
2) Identify break points and trend changes. These are key data points.
3) Note the directions of these changes.
4) Think hard about what these observations are actually telling you, not what you want them to say.
5) Double down on 4) if you are looking at a ratio. Ponder that denominator.
6) Don’t cherry pick. It’s dishonest.
There are a lot of ways to look at a data set: linear and log scales, rate of change, etc. Chose the one that gives the clearest picture of the data you want to analyze, or simplifies the analysis, or makes it easier to understand. Studying different views can be informative, as can a comparison of different data sets.
Here is the working page at FRED for the graphs in this post. I encourage the interested reader to spend some time working with the capabilities of this very powerful tool.
In case it’s not obvious, I’ll tell you that I write these posts because they interest me and I think they generate some knowledge, or at least information, that is worth sharing. I have virtually no interest in the fool’s errand of convincing anybody that I am right – either the data analysis convinces you or it doesn’t. So unless you have better data, or can point out some specific flaw in my reasoning [and then tell me specifically and in detail how to get it right] don’t bother arguing with me.
I appreciate rational discourse, and am always willing to engage thoughtful readers. I’m also willing to be proven wrong by a cogent argument. That said, though, I don’t really care if anyone comments. At this point, I’d almost rather nobody did. But if you chose to, please do me the courtesy of having your comment be somewhere in the general vicinity of on-topic. And – fair warning: naked assertions and unsubstantiated ideologically approved talking points will be scoffed at, so please check that nonsense at the door.
feel free to scoff.
i am prepared to agree with you about spending growth.
but i think your graphs don’t make your point. forgive the self reference, but i am supposed to be fairly good at reading graphs and such esoteric quantitative information. or at least was. i think your graphs are too complicated “internally” to be easily read by anyone but you and perhaps some other expert who already understands the point you are trying to present…. or just wants to agree with it enough to convince himself he “sees.”
i think a little arm waving would help.
and while a previous commenter ran off the rails a bit (in my opinion) this is a blog, fer chrissake. you are going to get opinion and opinion, as well as logic, is always in the eye of the beholder. that commenter was no where near close to the nonsense i have had to deal with in reply to my own essays. i figure if we can’t convince them, we might help someone else along the way. and while i lose my temper from time to time at what i regard as deliberate time wasting dishonest or really really ignorant comments, i don’t set myself up in advance to expect them.
I won’t scoff at you or at anyone who engages in rational discourse.
I have no expertise. I make graphs as a hobby. The point of these 3 posts is to share what I learned in making them.
If any one of the graphs is too esoteric, I’ve offered alternatives, and they all tell the same simple story. There is no inconsistency.
If reducing the time series data to a sequence of connected straight line segments is too internally complicated, then I’m at a total loss. How could I make it simpler?
And, yes, I know this is a blog fer chrissake. I just want people to engage their brains. it’s rally not asking for a lot.
And I wouldn’t set myself up to receive nonsense if I hadn’t just been served several large platters of it.
I am sure some do, but isn’t this giving most too much credit for what is actually appalling ignorance, including not even wanting to know the truth?
Jazzbumpa no doubt you’re right about the trajectory of federal spendning.
While I understand that your point in this post was simply to say “what is” not “what should be” let’s the latter question is why we take interest in the former.
federal spending under Obama has gone down like you say unlike the Right that claims he’s been out of control.
However, some on the Left would dman him for that of course.
I myself don’t consdier it a good thing. The question is for me, why did it go down?
I don’t think it’s because of the Amdinistration first and foremost.
As you pointed out in a previosu post, the drop has come in the last 2 years-ie, since the Tea Party took over in Congress.
In the first two years there was a modest spending increase, which while not enough was enough to at least get us out of the recession and prevent a double dip.
In the last 2 years if Paul Ryan’s House had passed the PResident’s Jobs Bill-AJA-we would first of course have much more spnding, and would be creating close to 200,000 jobs a month if not more-after all we’ve averaged close to 150,000 the past two years.
In this admittedly pedantic post, I set aside my normal smart-assed glibness and played it as straight as I am able. Your point is well taken, but I chose to err on the side of politeness.
I can’t disagree with anything you said here. My reason for simply stating what is, is to set the record straight, and expose the LIE. For me to have said anything normative would have been an invitation to go down a Keynesian vs neoclassical side road.
Now, that is a discussion worth having, in its own right. However, I chose to not go there because it has taken me three separate posts to TRY to get across a point that should have been blazingly obvious in the first one.
As a blogger here, that is a lesson I’ve had to relearn repeatedly. Alas, it has a hard time sticking.
I’m playing with Swing City tonight at Plymouth Roc in Canton, MI, 7:30 – 9:30. If you’re in the area, pop in and say hi to the bass trombone player.
I’ll check back in tomorrow.
Yes, the right wing lies……
Why would there be any need to qualify that fragmaent of a statement. It better serves as a statement in its own right. The most oft repeated trope in modern American political discussion. Ryan lied about…. Romney lied or significantly “revised” his position on…. McConnell defines that referencde to witnessing someone’s lips moving. Boehner cries as often as he does because as a good Christian he knows he’s headed straight to hell for all the whoppers he has ever told. Republican debates leading up to the nomination for President might best be refered to as a Liar’s Convention. Simply put, the right wing lies about every and any thing.
i never said you were inconsistent. I just said your graphs were not compelling. And I tried to say the reason for that was that each axis was itself a combination of ingredients that was to say the least intellectually taxing to parse out.
I won’t claim that i am not just too dumb to follow them, but I would suspect that many who think they are following them just like the claimed results.
That is hardly an unusual state of affairs.
More power to you Jazz. Try to keep us simple folk in mind.
Barack Obama, the worst Republican President since Hoover. Reagan and both Bushes increased gov’t jobs. Obama has reduced gov’t jobs, and is proud of the fact. If gov’t jobs had held steady, unemployment would be under 8% now.
Hey Min, Do you ever wonder which of his advisers convinced him that less workers in the government was a good thing during a depression. Or is he trying to outdo Clinton/Gore and doesn’t understand the difference in the economies?
Not a qualifier. Just pointing out a typical example.
Since you bring up gov’t jobs, here is the data. Federal jobs down slighlty since the cencis surge, state jobs down quite a bit more.
But the really big losses are at the local level.
I suspect this is due in part to reduces fed payments to states, etc. Certainly the erosion of the property tax base plays a big part for local.
Spending as a percentage of GDP was up dramatically due to the stimulus in early 2009 and bank bailout in 2008. Both were supposed to be one time items, but the level has remained high. Here’s the graph of federal spending to GDP. It’s hit all time highs (excluding WWII) under Obama:
After the initial jump, spending has remained flat, but the jump took us to a level never seen in peace time and almost 30% higher than when Clinton left office.
JzB: One of the quickest and most effective means to stimulate our current economy is grants to states, cities, and towns. It creates jobs, too. 🙂
if i remember, GDP has not yet returned to “trend”, unemployment is still high, and the number of government workers has declined.
moreover i don’t know that spending/GDP is one of the ten commandments. there may be a reason why spending/GDP should be high. you yourself seem to admit the need in response to the bank crisis and the recession. can’t see why spending needs to go down immediately because the banks have got theirs.
to make any sense at all you would have to identify some spending and make the case why it is unreasonable or at least an increase over previous spending not caused by, or justified by, the crisis/recession..
just citing graphs and magic ratios doesn’t do much for me… whether from you or Jazz. except that i happen to agree with jazz.
anon @ 11:14
Since you cited actual data, no matter how irrelevant, I won’t scoff. However, I will castigate you for your use of the terrible, horrible, no good, very bad metric I skewered in the previous post.
I can’t even say, “nice try.”
Thank you for playing, and have a nice day.