Economics

Obama's Empty Cost-Containment Rhetoric: Should We Call Him Out on It?

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Matt Welch already zeroed in some of the more b.s.-laden aspects of President Obama's Braveheart-level brave pledge to freeze a tiny wafer-thin aspect of federal spending. To use Obamaesque rhetoric: Let's be clear. This freeze is likely to be as effecfive in curbing spending as cryogenic freezing of Ted Williams' head was for keeping the Splendid Splinter in good shape for the baseball draft in the year 2525.

Another point to note on Obama's three-year freeze on discretionary non-defense, non-homeland-security spending: The part of the budget that Obama is chilling is responsible for a whopping one-eighth of annual federal spending. By the prez's own accounting, the action (which I guarantee won't hold up anyway) would save at max a whopping $15 billion in fiscal year 2011.

To put that in perspective: The budget deficit in 2009 was $1.4 trillion. Which will likely be matched, or nearly matched, in 2010. The budget in 2009 was a hair under $4 trillion and was first figured at around $3.5 trillion for 2010 (expect that to rise, as it normally does).

To talk about possibly trimming $15 billion (and that's only in foregone increases to whatever is already being spent) on a budget this size is like an already-broke dinner companion foregoing his third appetizer. It's not gonna help much when the bill comes due.

But you know what? There's an even bigger trend that's sweeping the "developed countries" (by which I mean to say: the countries that will soon be totally busted) that is the start of a true Maalox moment that may never end.

The chart at the right is from an Economist story about the resurgence in big government throughout the OECD nations (basically, the wealthier nations of the world). After a pretty stunning, across-the-board reduction in government spending as a percentage of GDP even among most Western European nations famous for their lavish welfare spending starting in the mid-1990s (hey, you read about it in Reason first), big government is back with a vengeance.

As The Economist notes, the easy 'xplanation for this is the financial crisis. But in fact, the drive skywards started "even before Lehman Brothers collapsed" and "George Bush did not even go through a prudent phase." Nor did his European counterparts, who had started hiking spending long before any credit freeze had given the economy anything approaching an ice cream headache.

If Obama is being intellectually serious (as opposed to simply bowing to political pressures in the wake of the Coakley defeat, the thank-god failure of a terrible health-care "reform" bill, and the lead-balloon-like drop of his overall ratings), he wouldn't be diddling around with a minor freeze on tiny spending. He'd be acknowledging forthrightly that out-of-control government spending (at all levels) is indeed the problem that's driving instability and lethargic markets. And he'd be taking serious action to make it clear that what he once called a "new era of fiscal responsibility" is actually upon us.

That's a big "if," of course, especially coming from a pol who sprinted from his laudable (and, in retrospect, laughable) campaign pledge of a "net spending cut" even before he took office.

Hat tip to Economist article: Alan Vanneman.

NEXT: Reason Writers Around Town: Matt Welch on Bloggingheads.tv Talking Democratic Depression With Michelle Goldberg

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  1. Should We Call Him Out on It?

    Might as well. I ain’t got shit else to do today.

    1. Only a racist would respond that way.

      1. Only a racist sees those words as racist.

        1. Only a racist would make that accusation.

          1. Suki, you’ve now twice proved Jonny’s point. What’s really going on here is that you hope that hurling one of worst-insults-in-the-world will shut someone up.

            You may not actually be a racist yourself, but you’ll use the sledgehammer of accusations or racism to extort silence.

            So what does that really make you? Weak, impotent, and adolescent at making an actual argument would a good place to start in describing your understanding and faculties.

            At least you are not a racist, but what you are as a man with any kind of intellectual abilities is effete, droll, and weak.

            1. You should probably see if there any clues available in the Craigslist “Free Stuff”.

            2. Suki, you’ve now twice proved Jonny’s point. What’s really going on here is that you hope that hurling one of worst-insults-in-the-world will shut someone up.

              More like you must be new here. See any other Obama story at reason.

              Might want to figure out what sex someone is by calling them by the wrong one too. Not many of us gals around here but we do exist.

    2. “Should We Call Him Out on It?

      I vote no. It is much more fun watching the left have an apoplectic fit that “The One” would even consider making a symbolic, meaningless gesture that barely hints spending might be excessive.

      The only slim hope is retaking congress and dividing this government. No one can be as effective making that case, as the current progressive temper tantrum.

      Just get out of the way, pull up a seat, grab some popcorn, and watch the show.

  2. So, it is Bush’s fault.

    And I have to say, I’m not surprised to see Germany’s dip but Canada’s drop is unexpected.

    Though, they’re all going upwards. And that’s not good in the slightest.

    1. Iraq, Afghanistan, and general 9/11 security paranoia were large increases in government spending. Add in the Keynesian response to the current economic crisis (without really removing the security and war spending), and there you go.

      You can see this in the graph for the US-falling until 2000 (9/11), rising until 2003 (Iraq war), then stable until 2007 (economic crisis starts), then rising again.

  3. Words, words. It means nothing to me without a pie chart.

    1. They always want pie! What’s up with that?

      1. No… more… peh…

      2. Pie is the thinking man’s dessert.

        1. Which must suck for you. I’m just sayin’…..

  4. If Obama is being intellectually serious

    I do not believe the Presidential Suit is capable of being intellectually serious. He’s over his head. And, with any luck, we will sink beneath the surface without a trace.

    Hail, Biden!

    1. Obama is intellectually committed to radical liberalism.

      Everything he says and does is in furtherance of that cause.

      So anything he says that would even appear to be slightly contrary to that objective is merely another attempt to fool people into not opposing him so he can get on with the plan.

      1. Yeah, he’s been really “radical” the last 12 months. That’s why he’s supporting Bernanke, that well known Communist, and refusing to cut military spending. The guy won’t even fight for his own watered down health bill, the only thing Barry is committed to is the health and welfare of the Obama family.

        1. He hasn’t been fighting for his healthcare bill?

          What exactly do you call fighting?

          I guess if you define it as personally showing up in the House and Senate chambers with a sword and hacking to bits anyone who won’t pledge to vote for it, then yeah he’s not “fighting” for it.

          And of course the bill itself most certainly does qualify as radical – as does cap and trade – union card check – the EPA unilaterally deciding to requlate CO2 as a “pollutant”, etc. etc.

    2. You’re right of course. He’s lost and wandering in the desert w/o a compass. From one moment to the next, another direction looks promising. Then the wind changes and another direction looks promising…

      1. I first read that as ” Pandering in the desert… “,and thought that doesn’t make sense.

        Then again,it kind of does.

  5. “we will sink”

    OOPS. That was an unfortunate , if not Freudian, slip.

    “Man overboard!”

  6. possibly trimming $15 billion … is like an already-broke dinner companion foregoing his third appetizer

    It’s more like foregoing a glass of water.

    1. Kind of like inflating your tires to address the energy isuue.

  7. laudable (and, in retrospect, laughable)

    So when we all knew it was bullshit, it was awesome, and now that we all know it’s bullshit again, it’s funny?

    If the “calling out” is going to be this trenchant, you’ll be hearing from the Secret Service, buster.

    Best chill.

    1. My thoughts exactly. So-called libertarians helped foist this man upon us. At least admit you were either stupid, naive, or so full of BDS that you wanted to screw the country.

  8. $15B here and $15B there — pretty soon you’re talking about real money.

    I’m hesitant to chastise a liberal president who tries to cut spending, regardless of his motives or impotence.

    1. Wait, you don’t think he’s actually going to do it, do you? Because if you do, I’ve got some real nice property in Arizona you might be interested in. It’s right by the ocean, just lovely.

    2. “cut spending” ??

      Are you serious ?

      This will FREEZE spending which might mean cutting the increase.

    3. $15B is basically spit in the ocean versus a $1.5 trillion deficit. Each little piece is only 1% of the problem.

      Neither party wants to address the elephant in the room — massive underfunded entitlements, starting with way too many government employees with bloated post retirement benefits, and of course, the Medicare and Social Security messes.

  9. The big money is in defense, no one has the courage to cut it, grab your socks . . .

    1. Bull. Entitlements.

    2. For starters, defense is supposed to be a function of the state, but….:
      http://www.usgovernmentspendin…..pie_gs.php
      57% (by the government’s admission) goes to pensions, health and wlefare

    3. The big money is in defense.

      This used to be true a generation ago, but today it’s just a myth. Defense spending both as a share of GDP and as a share of total government spending is still very close to historic lows for our country, despite having ticked up a bit after 9/11.

      1. 700 billion dollars is a lot of money by any standard where I come from.

  10. The unfortunate aspect of the chart is that it shows US pols the path to arguing for sustained govt spending: we’re still below every other developed country as a percentage of GDP.

    1. Not when you factor in state spending, which is much less a factor in Germany and Canada, and doesn’t really exist in France and the UK.

  11. If you subscribe to the Progressive notion that all money and property ultimately belong to the State, we can reduce costs by not allowing people to cling (bitterly) to so much of the money “society” “allows” them to make.

    1. Paging Tony and utilitarian arguments about the state defining our rights and we have no right to our income.

      1. You have the fundamental right to pursue happiness, not to keep every scrap of property you get your greedy hands on.

        1. That’s funny, Tony! I didn’t realize you were such a comedian!

  12. The question I have when reading that chart: Who the fuck is buying into this ponzi scheme? If it’s the governments themselves or their pet central banks, then it’s worse than it looks. If it’s individuals – well caveat emperor suckers.

  13. This freeze is likely to be as effective in curbing spending as cryogenic freezing of Ted Williams’ head was for keeping the Splendid Splinter in good shape for the baseball draft in the year 2525.

    That’s one of the funniest sentences I’ve read this side of Mark Steyn.

  14. I don’t see how you can do anything but support the spending freeze, even if it is symbolic, even if it is a trial balloon, even if it is a small part of the overall problem. Yet the first sentence already calls the thing “BS”. If the pledge reduces government spending at all, then sign me up for the BS. I’m not dumb enough to think this will cure the budget problems or make health care numbers add up. Of course, I think the “BS” comment is directed to what is perceived to be Obama’s ultimate plot to announce a spending freeze, get a political bump, then raise taxes, institute socialism, mandate veganism, then profit from soybean futures. I admit, the details are a little fuzzy.

  15. Lamar, laughing at isn’t opposition to it as much as it is a belief that it’s a total lie.

    1. Fair enough, but then you wouldn’t be criticizing the proposal so much as criticizing the president’s credibility on making proposals. I think we have to support the pledge even if we fully expect to later call him out on reneging. When we latch on to an idea or support a pledge, the scar on the politician’s credibility is much bigger when the politician breaks the pledge. If you like the idea, then support it. Otherwise, you can’t really complain when the pledge is broken. All you can do is say “I told you so”, which doesn’t carry very much political capital.

      1. Fool me once . . .

        1. Actually, he didn’t fool me once. But if you think I’m going to support anything the man says, you’re going to have to give me something better. There has to be at least at a Bart Simpson attempt: “I can’t promise I’ll try. But I promise I’ll try to try.” We don’t even get that. Smoke and mirrors.

          1. So you’ll oppose something with which you ideologically agree because you wish to express your mistrust of the president? Simple solution: I support the president’s proposal but I don’t think he’ll follow through with it. Isn’t that more truthful than opposing the proposal?

  16. First thing they’ll freeze is all FBI corruption investigation in Chicago. That’ll save a few bucks.

    1. Cleveland too. Those rotten, corrupt GOP machines.

  17. Otherwise, you can’t really complain when the pledge is broken.

    Just watch me.

    1. Well, I mean, c’mon, I’ll complain too.

  18. “As The Economist notes, the easy ‘xplanation for this is the financial crisis. But in fact, the drive skywards started “even before Lehman Brothers collapsed” and “George Bush did not even go through a prudent phase.” Nor did his European counterparts, who had started hiking spending long before any credit freeze had given the economy anything approaching an ice cream headache”

    Of course. During good times, we “need to spend” because we have the available funds, and it would be cruel, heartless and capitalist to not provide for other. And during bad times, we “need to spend” because “the Middle Class is hurting.”

    1. Exactly. “Arch conservative” George Bush and “radical liberal” Barack Obama basically follow the exact same policies. When are people going to wake up and realize we actually live in a one party state? And that state is committed first and foremost to preserving the interests of the people who run it.

      1. No difference, eh?

        Did Bush ever push cap and trade or get the EPA to declare CO2 as a “pollutant” as a political ploy to force the hand of Congress in passing cap and trade?

        1. Did Obama ever start a war for no reason?

          1. Yes – he’s started a war on capitalism.

            1. Again – do you believe Geithner and Bernanke hate capitalism?

              1. Neither one of them is the president.

          2. Wow. Until the moment I read what Geotpf wrote, I despised Obama. Now I understand why I should let him ruin the country and praise his holiness. It’s so clear now.

          3. Yemen.

        2. Nope, but he did push a massive new Medicare entitlement, a rebirth of agribusiness subsidies, and No Child Left Behind.

          What, you think history started in 2007?

  19. I just found out that Obama did at least ONE thing last year that I can get behind: He signed a joint resolution making Casimir Pulaski a US citizen (Pulaski died at the Siege of Savannah in the Revolutionary War). With all of the busy stuff going on, it’s nice to see the government take time out for a Polish brotha.

    1. He also let the Navy kill those pirates. I supported that.

      1. Let them? He was The One with his finger on the remote trigger shootie thingie at the Whit House!

  20. Obama has shifted the field of rhetorical battle to spending … SPENDING ???? That is the worst place for him to fight given his current initiatives.
    We should see his bet and raise him. What can he do, say he doesn’t like the idea of a freeze ?
    It will be another CSPAN promise that he’ll be caught on. Everytime someone says, I agree with Obama, lets freeze spending on program X when Obama says thats not the kind of freeze he meant the public will be left with the, “I was for a freeze before I was against it”.

  21. The GOP response to the SOTU should include a laundry list of things that should be frozen as well. For example the Stimulus, the TARP program, the Fannie and Freddie bailout pot.
    Just total up the “savings” from freezing those programs and compare that to the 15 billion per year that Obama is proposing starting in 2011.

  22. Does Government here mean just the Federal Government or Government on all levels? The USA has a far more elaborate system of State and Local Governments than other nations.

    1. Actually, of the countries shown Canada and Germany both have Federal* systems, so I thought the same thing.

      *Although Canada’s Provinces do not have the same powers as US states have, they still have extensive responsibilities, including taxing powers and running their own Medicare systems by Federal mandate. I know less about Germany but understand that the Lander take theire sovereignty seriously and have extensive taxing powers.

      Comparisons between Federal and Unitary States should offer some explanation as to whether any effort has been made to include taxation at all levels of government.

      1. My impression is Canadian Provinces have relatively more authority (and % of the government budget) vs the Federal level when compared to US States.

    2. True, but when we’re discussing budget deficits, the federal level is the 800 pound gorilla. States have a number of constraints that prevent them from maintaining a huge deficit, and lower forms of government (in general) can’t do it at all.

  23. Am I the only one who looked at that chart (and this one) and thought, “LOL, decaying Britain.” (It’s a meme; I’m aware of the contradiction.)

    The Economist comment threads are ridiculous, by the way:

    I trust big government more than big firms. The past two years have proven that self-interested corporate entities will consistently bring society to its knees if allowed to operate too freely.

    God, someone must have slept through the 1900s. Remind me how well state-directed economies turned out.

  24. Lazarus Long’s take on politicians and keeping promises:

    “Reform politicians not only tend to be dishonest but stupidly dishonest?whereas the business politician is honest? I don’t mean that a business politician won’t steal; stealing is his business. But all politicians are non-productive. The only commodity any politician has to offer is his jawbone. His personal integrity?meaning, if he gives his word, can you rely on it? A successful business politician knows his and guards his reputation for sticking by his commitments?because he wants to stay in business?go on stealing, that is?not only this week but next year and years after that. So if he’s smart enough to be successful at this very exacting trade, he can have the morals of a snapping turtle, but he performs in such a way as not to jeopardize the only thing he has to sell, his reputation for keeping promises.

    But a reform politician has no such lodestone. His devotion is to the welfare of all the people?an abstraction of very high order and therefore capable of endless definitions. If indeed it can be defined in meaningful terms. In consequence your utterly sincere and incorruptible reform politician is capable of breaking his word three times before breakfast?and not from personal dishonesty, as he sincerely regrets the necessity and will tell you so?but from unswerving devotion to his ideal.

    All it takes to get him to break his word is for someone to get is ear and convince him that it is necessary for the greater good of all the peepul. He’ll geek.

    After that he gets hardened to this, he’s capable of cheating at solitaire. Fortunately he rarely stays in office long?except during the decay and fall of a culture.”

    Robert A Heinlein, Time Enough for Love, p110, Ace/ G. P. Putnam’s Sons, 1973

    1. Precisely. The very worst kind of man to elect to a positon of power is one who has high ideals but no principles. His sincerely wants us all to live in paradise, and he will lie brilliantly and relentlessly to make sure that happens. John Edwards come to mind.

  25. the lead-balloon-like drop of his overall ratings

    The MythBusters actually made a lead balloon that rose in the air. And it was black, so RACIST!

  26. I wanna know in who’s fantasy world does government spending as a % of GDP flatten out this year and go down next year?

    (As depicted in the chart.)

    1. Assume gov’t spending is the same and the economy grows. Or assume GDP growth outpaces gov’t spending growth. Either way you get the curve as described.

  27. federal budget increases by year under bush, first term…

    01- 1.8%
    02- 6.0%
    03- 4.6%
    04- 3.2%.

    OR:
    reagan first ‘term’ increase was 14.5%.
    bush first ‘term’ increase 18.9%.

    obama’s first year?
    18%. at least dems can argue that obama didn’t spend as much as bush, in his first year.

    http://en.wikipedia.org/wiki/N…..tial_terms

  28. It’s important to note that the obama mini-trim is after he has increased discretionary spending a cumulative 24% for the first two years. How about just rolling everything back to 2008 levels (without TARP), and then freezing spending for a decade? It would be a Good Start.

  29. First, Obama has increased spending so much in his first year that this “Freeze” won’t even be felt.

    Second, if Obama makes the same lame George Bush promise to “cut the deficit in half in five years” I hope he gets called on it.

    Our current deficit is $1.4 trillion, next year it will be $1.3 trillion and the following year it will be just under a trillion. Assuming he follows through and cuts the deficit in half to $850 billion in the fourth year and $700 billion in year five.

    He will have added over $5 TRILLION to the NATIONAL DEBT. Are the Democrats really going to applaud that promise at the state of the Union?

  30. Hmmmmm……I guess we should all conveniently forget that all of these categories he is now in favor of “freezing” he just gave 5%-7% raises in his 2010 budget?

    Even with a 3 year freeze, because of the idiotic first year increases they’ll still be getting more than they should in a down economy!

    The GOP should call him on the “freeze”, point out that it’s meaningless and make CUTS a part of their platform. No way Obama can support actual cuts with his base….he’ll be exposed in front of the public yet again…

  31. The part about this article and board that really gets me is that everyone (to a person) seems willing to assign blame solely to ONE party. From my vantage point, I don’t see much difference between big-government neoliberalism and big-government neoconservativism. Case in point, the Senate rejected today a bipartisan commission to address the spiralling deficit. Putting the kabosh on such a radical notion as entitlement spending reform was truly a bipartisan effort. 23 Democrats joined 24 Republicans in preventing the MAJORITY (53 voted Aye) from addressing entitlement reform. Why? They are more concerned about their reelections than they are about the future of this country. Neither party has a monopoly on stupidity.

  32. Oh, and let’s also conveniently forget that Barry said FOUR times, on tape, during the campaign that the exact “freeze” on spending he is now proposing was a bad idea.

    The freeze idea was a main point of McCain’s campaign. Even if the public responds well to this, all the GOP has to do is point out Obama is way late to the game….

  33. You mentioned Bush and you mentioned Obama but you never mentioned Congress. Look at the chart; spending increased in 2007 – right after the election that put Reid and Pelosi in control of Congress.

    1. Everybody knows the Congress is just the rubber stamp on the big giant checks the President writes. Reid the Constitution!

    2. You are right on target. The proof is in the numbers.

  34. Remember folks, a “freeze” that doesn’t include “entitlement” (read WELFARE) spending is no freeze at all. THE WON! is looking for a way to save his sorry a$$, and if anyone recalls, he mocked this idea on the campaign trail. As someone pointed out earlier today, “The Ego has landed”. Outright lies will now be the order of the day.

    1. Remember, we didn’t have Him in 1984.

  35. All budget savings are based on this old joke.

    The boy ran into the house and said exitedly, “Dad, I saved a dollar today by running home behind the bus.” The gruff father gave him the back of his hand. “Stupid child, you could have saved five dollars by running home behind a cab.”

  36. Spending freeze? OK, put a freeze on
    entitlement spending: Tax supported
    housing, welfare and freebies for non-citizens.
    Then I’ll believe you mean it(that’ll be the day).

  37. The part about this article and comment board that really gets me is that everyone (to a person) seems willing to assign blame solely to ONE party. From my vantage point, I don’t see much difference between big-government neoliberalism and big-government neoconservativism. Case in point, the Senate rejected today a bipartisan commission to address the spiralling deficit. Putting the kabosh on such a radical notion as entitlement spending reform was truly a bipartisan effort. 23 Democrats joined 24 Republicans in preventing the MAJORITY (53 voted Aye) from addressing entitlement reform. Why? They are more concerned about their reelections than they are about the future of this country. Neither party has a monopoly on stupidity.

  38. One thing that should be noted in the interest of fairness, is that part of the steep climb of the curve at the end is simply due to the economic contraction. Since the chart is presented in terms of percentage of GDP, if GDP falls, the government percentage goes up even if no policies change. That’s also why the line is projected to drop – not because governments will change their minds and start cutting spending, but because (hopefully) the economies will pick up again and GDP growth will increase faster than government growth.

    However, it does illustrate an important point – when recessions happen, the logical, rational response is to cut spending and start saving and rebuilding the fiscal balance sheet. Individuals do it, and corporations do it. But governments don’t. They grow. Keynesians would have you believe that this is a good and necessary thing – that it’s good have something which keeps consumption going when everyone else is cutting back. But you could also argue that this indicates that government is unresponsive to the signals of reality and acts as a brake on the changes necessary to recover from an economic imbalance caused by a recession.

  39. I also find the comparison between Canada and the UK interesting. Here in Canada, we’ve been on a long-term trend to cut the size of government since the early 1990’s. So was the UK. But in 2000, The UK turned and started piling on the spending. Canada stuck to its guns and continued to allow government growth to fall behind GDP growth. The result is that Canada’s government is now very close to the size of the U.S. government, while Britain has joined its moribund EU partners with big government, big debt, and big taxes.

    So what did they get for all that government? Is their health care system better? Are the people happier? Do they get more education? Is there less social strife? Are standards of living higher? Is their unemployment lower?

    The answer is no to all of it. They got nothing to show for it, except a bloated public sector and a mountain of debt. Canada and the UK have similar governmental structures, the people are similar, we even share the same Queen. We took a path towards smaller government, and we are much, much better off for it.

    You can see the same pattern if you compare spending between any two countries who chose different governmental paths. The country that chooses to keep government small almost always outperforms the other, in almost every measure.

  40. This is nothing more than throwing “crumbs” to the angry, frustrated, sick-of-the-spending voters!

    Are the Obama maniacs going to fall for this BS?

    The rest of us certainly are wise to his ruse.

    Maybe another Senator will call out “liar” during the State of the Union.

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