Wednesday, January 23, 2013

Government Spending is Down in the Obama Era

Kevin Drum: Government Spending is Down in the Obama Era. "Republicans like to say we have a spending problem, not a taxing problem, but the evidence doesn't back that up. Total government spending didn't go up much during the Clinton era, and it's actually declined during the Obama era. In the last two decades, it's only gone up significantly during the Bush era, the same era in which taxes were cut dramatically. What we have isn't a spending problem. That's under control. What we have is a problem with Republicans not wanting to pay the bills they themselves were largely responsible for running up."


Paul Krugman explains it with a bit more rigor, The Non-Surge in Government Spending. "So how can we get a better picture? First, express spending as a share of potential rather than actual GDP; we can use the CBO estimates of potential for that purpose. Second, keep your eye on the business cycle — and, in particular, on how spending is evolving now that a gradual recovery is underway. So, let’s look first at a longish time series of total government spending as a share of potential GDP:"


Mark Thoma points to a few articles expressing America’s Fiscal Policy is Not in Crisis. The long term problems are rising health care costs and the immediate problem isn't the deficit or debt but jobs.

Update: Nate Sliver a few days ago on What Is Driving Growth in Government Spending?

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