Saturday, May 26, 2012

The silly Obama spending narrative

There's a bit of a viral meme going around on Facebook and elsewhere the past few days. It's the claim--now being echoed by the President and spokesmodel Jay Carney--that federal spending hasn't increased all that much under Obama, that federal spending has risen "at the slowest pace of any President in almost 60 years (Obama's words)."

The source of this claim is an article at MarketWatch by Rex Nutting. Mr. Nutting says:
Almost everyone believes that Obama has presided over a massive increase in federal spending, an “inferno” of spending that threatens our jobs, our businesses and our children’s future. Even Democrats seem to think it’s true.

But it didn’t happen. Although there was a big stimulus bill under Obama, federal spending is rising at the slowest pace since Dwight Eisenhower brought the Korean War to an end in the 1950s.
He than provides some numbers--derived from the CBO--to support the claim. To whit:
  • In the 2009 fiscal year — the last of George W. Bush’s presidency — federal spending rose by 17.9% from $2.98 trillion to $3.52 trillion. Check the official numbers at the Office of Management and Budget. 
  • In fiscal 2010 — the first budget under Obama — spending fell 1.8% to $3.46 trillion.
I'm going to stick just with these two years--2009 and 2010--for the moment. But first, I should note that Politifact backs up the assertion Mr. Nutting is making, calling it "mostly true." And really, since the numbers are taken from the CBO and easily checked, how could they be wrong? Right?

Well...

There are two big elephants in the room: the Stimulus Bill and TARP, the first passed under Obama in the beginning of 2009, the second passed under Bush (with full Democrat approval, including then-Senator Obama) at the end of 2008. Nutting is dropping the cost--or most of it--for both of these bills in the lap of Bush.

And with regard to TARP, maybe that's fair. Maybe. But it's certainly not fair with the Stimulus Bill. That's Obama's, lock, stock and barrel. Nutting assigns Stimulus monies spent to Obama for 2009, it is true. But what he doesn't do is figure in the revenue losses. Bush has to eat those in 2009, even though he had nothing to do with the bill.

As to TARP, consider this: while it is true that Bush initiated the program and monies where doled out and promised under his watch, much more of it was doled out by Obama and Geithner in 2009. And more importantly, those monies were mostly repaid by financial institutions after 2009. That means a net gain for Obama budgets and a net loss for Bush's budget. How much are we talking about here? About $150 billion went out in 2009 (under Obama and Geithner), and about $110 billion came back in 2010 (more in 2011).

With this alone being taken into account, Netting's narrative falls to pieces, for the effect of these numbers would be to drop the 2009 total to $3.47 trillion and raises the 2010 total to $3.57 trillion, meaning spending increased under Obama's first budget by 2.8%, as compared to Bush's last budget.

But all of this is neither here nor there, because it masks the real problem: the selective use of metrics by people arguing a point of view. In this case, raw CBO budget numbers are being used to show increases or decreases in federal spending, but those numbers fail to account for a host of other things. So, the simple response--for someone on the other side of the ideological fence like me--is to switch metrics.

For instance, we could just look at federal spending as a share of GDP. Like with the following graph:


Well look at that. The Obama Administration doesn't look so rosy, now. 2009--because of the Stimulus Bill and TARP, by and large--skyrockets up. And up is where those spending levels stay--as a percentage of GDP--throughout Obama's term, never anywhere close to the levels from previous years. And in those years--if we remember--Bush was saddled with the costs prosecuting a war or two, dealing with Hurricane Katrina, and the mortgage meltdown that almost destroyed Fannie Mae and Freddie Mac.

Now, Obama sycophants might fire back by arguing that the economy was in sad shape when Obama took office and continues to be weak. Of course, if they say that--if the Administration says that--it would have to back down significantly on its claims about the Recovery, about how the economy has turned under Obama. And that's not something they are prepared to argue, given the looming Election.

Thus, the simplistic metric is preferred for the Administration and its supporters, even though the numbers as a percent of GDP are used in other instances by both. Look at this dopey piece at Think Progress. Written before Netting's piece came out, it happily trumpets federal spending as a percentage of GDP, though it uses full 2009 numbers (saddling Bush with the Stimulus spending and TARP spending).

Even more oddly, it credits Obama for low numbers--with regard to revenues (which it wrongly associates directly with tax rates) and spending--for 2012. Let's remember the narrative for progressives and liberals, post 2010: Tea Party Republicans are getting in the way, they're obstructing the President and his goals at every opportunity, they held the nation hostage over debt. Yet now, the resulting decreases in spending and revenue--previously blamed on the Tea Party crowd--are now Good Things, accomplishments by the President that need to be trumpeted.

But let's cut to the chase: the National Debt. When Bush took office, it stood at $5.7 trillion When Obama took office, it stood at $10.6 trillion. It's now at $15.7 trillion. That's an increase of just under $4.9 trillion through 8 years of Bush, or an increase of $610 billion per year. Under Obama? An increase of over $5 trillion in a little under 3.5 years in office, or an increase of about $1.4 trillion per year, over double the average increase under Bush.

Sure, Obama's a regular miser when it comes to spending...

Cheers, all.

2 comments:

  1. http://www.powerlineblog.com/archives/2012/05/barack-obama-skinflint.php

    ReplyDelete