Government tends to grow in spurts, with budgets not decreasing after each spurt. This “ratchet effect” of fast growth then tapering off amounts to a long-term trend: growth.
You’ve probably seen Rex Nutting’s MarketWatch squib, the subject of many a Tweet and Facebook post. Entitled “Obama spending binge never happened,” it begins, “Of all the falsehoods told about President Barack Obama, the biggest whopper is the one about his reckless spending spree.” Nutting reframes the issue as one of the rate of spending growth . . . just as Republican apologists did in the ’80s, even though spending under Ronald Reagan’s first term grew at a whopping 8.7 percent — a bigger rate increase than Obama’s. Nutting entitles his graph comparing administrations’ spending growth rates “Slowest spending in decades,” indicating not how much Obama has been spending over revenue, but year-to-year rates of increase.
The prez gets a bad rap.
Well, yes and no. The graph should make party-loyal Republicans and Bush admirers cringe with shame. Sure. But Obama and the current Congress are still spending. Hugely. And rapidly — those dollars fly out the door!
Further, by maintaining high annual deficits, Obama has increased the federal debt so that this year it has shot above 100 percent of current Gross Domestic Product, a first for my lifetime.
Obama can be blamed for not doing the decent thing after the horrible six years of united government under the Republicans, he didn’t reduce spending.
In other words, he’s no Warren G. Harding, who presided over a huge contraction of government spending, thereby helping usher in a quick recovery from the post-Great War bust.
We could use a man like Warren Harding again.
This is Common Sense. I’m Paul Jacob.
9 replies on “Slowest Spending in Decades?”
THE PAST FEW YEARS HAVE BEEN THE WORST YEARS OF MY LIFE AND I BET A LOT MORE THO THEY WILL NOT ADMIT IT, ANOTHER FOUR YEARS OF THIS AND ITS GONNA BE RUN FOR YOUR LIFE
The hardest thing to get around is the idea that a reduction in the growth of spending is considered a cut.
If government spent the same number of dollars next year that it did this year, we’d be hearing about the cut in government spending.
According to the USA today, if government used standard accounting procedures, it shows “the government ran red ink last year equal to $42,054 per household” where “a U.S. household’s median income is $49,445”.
And “Federal debt and retiree commitments equal $561,254 per household. By contrast, an average household owes a combined $116,057 for mortgages, car loans and other debts.” So our average household is $677,311 in debt, mostly to government. According to http://www.freemoneyfinance.com/2010/08/big-difference-between-average-and-median-net-worths.html the average US household is worth $434,782.
We’re broke, and there’s no way to pay for politicians’ promises. Social Security and Medicare as we know it, will end in spite of the rhetoric of both Obama and Romney.
And unfortunately, very few politicians take it seriously (most that do take it seriously have a last name of Paul) and prefer to deal with sideshows. Even Paul Ryan’s budget grows the debt until 2040. Anyone want to bet that if implemented, it will last for 8 years? I’ll give 3 to 1 odds against it.
“THE PAST FEW YEARS HAVE BEEN THE WORST YEARS OF MY LIFE AND I BET A LOT MORE THO THEY WILL NOT ADMIT IT, ANOTHER FOUR YEARS OF THIS AND ITS GONNA BE RUN FOR YOUR LIFE”
Sorry for you. It’s been terrific for me. As f’ed up as GW was, I made it through that fine, also. Maybe you are not living right. Stop blaming your failures on others.
European Austerity has shown how cutting spending during a recession brings an economy to a quick burn-out. Austerity does not work, it is simply a knee-jerk reaction that is simple to understand, however patently unhelpful. Every major economist in the world, many with Pulitzers, agree that Governments must spend to grow an economy as shown in the following article:
http://republicans4ever.com/paul-krugman-rich-people-just-want-to-be-loved
[…] and attempts to worm around the consequences of bad financial practices, is not good. Ive reminded subscribers to my Common Sense e-letter of the post-WWI bust and quick recovery several times. […]
Warren Harding? The man often considered the worst president ever? The economic crisis that happened after his ‘recovery’ wore off was the worst in the history of the country.’
[…] […]
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