The Obama Spending Binge

Liberal bloggers have been passing around a piece by Rex Nutting at Market Watch arguing that although "almost everyone believes that Obama has presided over a massive increase in federal spending," in fact, "it didn't happen."

Except, well, it did.

Nutting's evidence consists of the a chart showing that the annualized growth of federal spending from 2010-2013 is 1.4 percent, compared with 7.3 percent from 2002-2005 during George Bush's first term and 8.1 percent from 2006-2009 during Bush's second term.

Nutting has a half a point: Federal spending did rise considerably during the 2009 fiscal year: Between 2001 and 2008, federal outlays (spending) rose from $1.8 trillion to $2.9 trillion, according to the Congressional Budget Office's historical spending data. That's a steep enough rise. But it's nothing compared to what happened during the next year: In 2009, outlays spiked, rising from the $2.9 trillion spent in 2008 to $3.5 trillion.

But what Obama did in subsequent budgets was stick to that newly inflated level of spending. Outlays in 2010 were just a hair short of $3.5 trillion. In 2011, they rose further, approaching $3.6 trillion.

So even if you absolve Obama of responsibility for the initial growth spike, he still presided over unprecedented spending that was out of line with the existing growth trend. Obama's average spending is far higher than under Bush or Clinton on both adjusted dollar levels and as a percentage of the economy. James Pethokoukis of The American Enterprise Institute has a handy graphic comparing annual Obama's spending as a percentage of the economy to George W. Bush's average spending as a percentage of GDP:

Make no mistake: George W. Bush was a tremendous spender, and he deserves some of the non-credit for making Obama's federal budget binge possible, especially during Obama's first year. But Obama and his fellow Democrats share the responsibility for allowing a spending spike to continue on at newly high levels, for posting record outlays and running record deficits — and for taking few if any effective steps to get the nation's economic and fiscal houses in order. 

Comments

[hk]

Socialists trying to defend their guy. No surprise.

[Joe M]

Liberal bloggers have been passing around a piece by Rex Nutting at Market Watch arguing that although "almost everyone believes that Obama has presided over a massive increase in federal spending," in fact, "it didn't happen."

Uh, okay, obvious falsity of this nonsense aside, why would they be passing it around if spending isn't bad in the first place?

[Joe M]

Thanks for fixing your character parsing, btw.

[Doctor Whom]

That's what I was wondering. Is Obama our savior because he's a big spender or because he isn't?

[fried wylie]

Is Obama our savior because he's a big spender or because he isn't?

Yes!

[Romulus Augustus]

And yet the spending is never enough.
There are still many millions of poor folk, many millions of students who don't have a 10:1 ratio to teachers, many millions who need jobs, millions without their own personal doctor. We still need to scrub dirty air and streams. And then there are our foreign brothers and sisters who need food, medicine and shelter, etc. etc. I daresay the U.S. could spend 50% of GDP ("After all, we are a rich nation.") and there would still be a considerable number of people complaining about how hard-hearted and
skin-flint conservatives and libertarians were.

[Rich]

There are still many millions of poor folk, many millions of students who don't have a 10:1 ratio to teachers, many millions who need jobs, millions without their own personal doctor.

WWW III/IV should take care of that part. 8-(

[Coeus]

So this is what my idiot liberal coworker was talking about the other day. He told me that bush spent more than Obama. I told him that even though Bush spent way too much, he still hadn't spent anywhere near what Obama had.

He then told me that Obama had presided over spending cuts. I asked him to show me these supposed cuts, and he refused (bearing in mind he was sitting in front of a computer with google already open). So I found a reference and he then refused to read it. I asked him why he chose to be ignorant, an he claimed to be proud of being ignorant.

Now, I realize that he thought this a witty reply, and wasn't serious. But the only explanation I can conceive of for his actions is that he was spot on in what he said. Some of these Krugites are actually proud of their ignorance.

[fish]

OBAMA 2012: Proud of being ignorant.

This shit practically writes itself.

[ant1sthenes]

Proud to be strong, you mean.

[Tulpa the White]

That sounds a great way to make yourself despised at work.

[Killazontherun]

I'm sure they pass the basic requirement of being an adult so they should be able to take another person's opinion when offering their own.

[Tulpa the White]

That would be nice, but it's not what's going to happen.

Most people are NOT comfortable when you challenge the groupthink. Look no further than the treatment I get on this blog.

[Coeus]

He's a special case. We get in a shouting match over politics (I let him draw me into the first several, just to be sure) and then start trading news and comedy links and laughing over shit. The changeover happens in seconds.

[Red Rocks Rockin]

He told me that bush spent more than Obama. I told him that even though Bush spent way too much, he still hadn't spent anywhere near what Obama had.

From my post below:

National debt during Bush's two terms: $4.9 trillion
National debt during Obama's first term (so far): $5.1 trillion

When your liberal idiot co-worker asks where you got the info, point him to the Treasury's debt-to-the-penny application. The combination of government data and cognitive dissonance should be enough to give that moron a brain anuerysm and you won't have to put up with his ignorance for a while.

[fried wylie]

The combination of government data and cognitive dissonance should be enough to give that moron a brain anuerysm and you won't have to put up with his ignorance for a while.

But won't that increase his company's insurance premiums or something?

[Coeus]

Unfortunately, he is quite immune to cognitive dissonance, much like all good progressives. But I persist because I just love winning every argument so much (and yes, the overheard arguments have made the other two workers in my cube farm lean start leaning libertarian on a multitude of issues).

[youcantbeserious]

Holy crap i just realized some of you don't understand the difference between deficits and debt!

[youcantbeserious]

Your comment is absolutely refuted by the article you are posting under. Also, how insanely ironic your second theme is ignorance.

Get it through your head: Bush doubled the budget and added no jobs in 8 years, Obama has held the line on the budget and has slowly stabilized the job market as well. Funny thing is, Bush could have still avoided deficits if he didn't transfer trillions in wealth to the top via his tax cuts for the rich.

[T o n y]

But which president presided over the beginning of the deepest recession in generations which is the ENTIRE FUCKING REASON government spending in dollars and as a % of GDP went up?

[Joe M]

You just don't learn. *cracks whip*

[Red Rocks Rockin]

But which president presided over the beginning of the deepest recession in generations which is the ENTIRE FUCKING REASON government spending in dollars and as a % of GDP went up?

But which president presided over the perpetuation of the deepest recession in 30 years which is the ENTIRE FUCKING REASON government spending in dollars and as a % of GDP went up?

[T o n y]

Which is to say spending on safety net programs went up as unemployment rose and the denominator in the spending/GDP ratio got smaller. Such things are normal in a recession and were particularly stark in the great big Bush recession.

What Obama policies are you blaming for the increase in spending? He didn't invent the safety net nor did he start the two wars. And even without calling the Bush tax cuts spending, they are a major contributor to the deficit. So, specifically, which Obama spending orgies are you referring to here?

[Red Rocks Rockin]

What Obama policies are you blaming for the increase in spending? He didn't invent the safety net nor did he start the two wars.

But he holds no responsbility for perpetuating them, correct?

Is there any real reason for us to be in Afghanistan over a year after Bin Laden had a bullet put through his skull? That shit has to be paid for to, you know.

Tell us, Tony, where is the $3.2 trillion going to come from to cover federal healthcare spending in 16 years? Because the math says that's where we're headed.

And even without calling the Bush tax cuts spending, they are a major contributor to the deficit.

So where are the tax bills from Team Blue that will cover every penny of the current deficit, PLUS all the extra spending they want to institute? Oh, that's right, they haven't proposed any.

So, specifically, which Obama spending orgies are you referring to here?

National debt during Bush's two terms: $4.9 trillion
National debt during Obama's first term (so far): $5.1 trillion

And once again you show you suck at basic math.

[T o n y]

Where is the deficit reduction from Republicans? Their budgets have so far been far worse on the deficit, because they refuse, out of pure ideological stupidity, to raise any revenues. Who supplied the particulars for that ideological stupidity? That would be you guys. None of you actually care about deficits. You care about shitting on poor people because Ayn Rand told you they were parasites.

Sure Obama gets some measure of responsibility for not ending Afghanistan sooner. Fine, assuming that it would have been a good thing to do. Probably so.

But what new spending programs are we talking about? The claim in this article is essentially that Obama went on a big avoidable spending binge. Real economists think that a bigger short-term spending increase would have resulted in more growth and hence better budgets. Though not blameless, Democrats have been better on both deficits and unemployment than Republicans in the past few decades. And the sad fact is that now that Republicans control Congress, nothing can get done because the Republican party has become a 100% reactionary movement of idiots who openly prefer big deficits and high unemployment because they think it makes their electoral prospects brighter.

[Red Rocks Rockin]

Where is the deficit reduction from Republicans? Their budgets have so far been far worse on the deficit, because they refuse, out of pure ideological stupidity, to raise any revenues.

I don't expect Republicans to propose tax increases--I expect them to propose spending decreases. Which they've refused to do.

Who supplied the particulars for that ideological stupidity? That would be you guys. None of you actually care about deficits. You care about shitting on poor people because Ayn Rand told you they were parasites.

Histrionic boy is histrionic.

But what new spending programs are we talking about? The claim in this article is essentially that Obama went on a big avoidable spending binge.

You do realize that Obama, in the spring of 2009, approved not just the deficit-increasing budget that Bush wanted to install, but an additional $400 billion on top of that which Bush had threatened to veto? Are you actually saying Obama couldn't have pressed the Democrats in Congress to come up with a budget that either 1) was less than Bush proposed, or 2) had the requisite tax increases to pay for it?

Real economists think that a bigger short-term spending increase would have resulted in more growth and hence better budgets.

Increasing deficit spending from 8-12% of GDP to 15-20% of GDP would have resulted in more growth in nominal terms, but not better budgets.

[Red Rocks Rockin]

Though not blameless, Democrats have been better on both deficits and unemployment than Republicans in the past few decades.

Which doesn't excuse their current malfeseance, as they've been in charge of one or more branches of government since the Great Exponential Credit Increase began in the 1980s.

[Adam330]

"What Obama policies are you blaming for the increase in spending?"
1) Continuing to sign monster appropriations bills, including tons of supplementals for all kinds of stuff from summer jobs, to wars, to disaster relief. Since he didn't immediately start to exit from the wars, he has to bear blame for the continued spending, including on his own Afghan surge. If he had started an immediate exit, I wouldn't ding him for the exit costs, but he didn't.
2) ARRA
3) Cash for clunkers
4) extension of Bush tax cuts in 2010
5) repeated cuts in the payroll taxes
6) various other tax credits like making work pay credit
I could go on.

[T o n y]

Yay a real answer.

But bear in mind it's not his stated preference to immediately enact austerity policies. So I suppose he can be blamed for not adhering to libertarian economic ideology, but from my perspective that's a good thing to be blamed for.

[Adam330]

Huh? So you now admit that Obama's decisions have led to the rising deficit, but he can't be blamed for the rising deficit because he wants a rising deficit? That's some real mental jujitsu you've got going.

[Red Rocks Rockin]

But bear in mind it's not his stated preference to immediately enact austerity policies.

Yeah, it's not like he spent a couple of years in the Senate bitching about Bush's spending prolifigacy or anything like that.

[T o n y]

Why wouldn't he? Bush's spending was profligate. Now countercyclical spending is needed to clean up the mess. Republicans are doing the opposite of what Keynes advocated at every turn, and the only problem is people too fucking stupid to figure out that their policies have done nothing really but cause recessions, despite the ready existence of a global network of information containing reliable sources that prove that obvious, decade-long reality.

[Torontonian]

Because the approach Keynes advocated is only effective in the short run, and some people are capable of thinking about the longer term impacts of fiscal policy decisions.

[Red Rocks Rockin]

Why wouldn't he? Bush's spending was profligate. Now countercyclical spending is needed to clean up the mess

Except it's NOT cleaning up the mess--it's kicking the can down the road.

Republicans are doing the opposite of what Keynes advocated at every turn, and the only problem is people too fucking stupid to figure out that their policies have done nothing really but cause recessions

Stop operating under the fantasy that economic downturns can be eliminated. This is especially true when people seem to think that running up an even higher balance on the credit card is going to get them out of debt.

[Old Mexican]

Re: Tiny,

Which is to say spending on safety net programs went up as unemployment rose and the denominator in the spending/GDP ratio got smaller.

And this makes any difference because....

What Obama policies are you blaming for the increase in spending?

a) Stimulus
b) Cash for clunkers
c) Military
d) Obamacare
e) The "investments" in "clean" energy
f) The bailouts
g) The new bureaucracies

Need more, Tiny?

He didn't invent the safety net nor did he start the two wars.

He didn't finish any of it, either.

"Why do you keep adding gasoline to the fire, you fool???"
"Hey, I didn't start it!"

[Anonymous Coward]

What Obama policies are you blaming for the increase in spending?

The stimulus, the Omnibus Appropriations Act of 2009 ($5 billion in earmarks, $8.5 billion spending increase for Labor, HHS, and Education), and might as well give him the auto bailouts and TARP as SENATOR!Barry voted for both them.

He didn't invent the safety net nor did he start the two wars.

He just perpetuates them in the former case and tries his damnedest to perpetuate them in the latter. Remember when he tried to renegotiate W's Status of Forces Agreement to keep the troops in Iraq? No?

And even without calling the Bush tax cuts spending

"All your money are belong to us", you say?

they are a major contributor to the deficit

No, the government continually borrowing money to pay old promises it has made to pay for things while making entirely new promises to pay for things it cannot afford is the sole contributor to the deficit.

[mustard]

Nice try. GDP cratered at the hands of BusHoover which is why the ratio went up. Math 101. Plus he inherited a booming economy from Gore so he has no excuse for spending, besides his own suckiness.

President Obama has to spend like crazy just to keep the country going with the mess he inherited and the GOP obstructionists in Congress keeping the long-term fundamental fixes to our economic system from getting done.

[Red Rocks Rockin]

GDP cratered at the hands of BusHoover which is why the ratio went up

Bullshit. When exactly did GDP drop? Because Obama's been deficit spending at 8-12% of GDP to get a 1-2% growth rate--in other words.

Now, take out all that deficit spending, and yeah, there's negative GDP growth.

Plus he inherited a booming economy from Gore so he has no excuse for spending, besides his own suckiness.

No, he inherited a recessionary economy from Clinton after the credit-driven dotcom bubble popped.

President Obama has to spend like crazy just to keep the country going with the mess he inherited and the GOP obstructionists in Congress keeping the long-term fundamental fixes to our economic system from getting done.

"TAX THE RICH AND ONLY THE RICH!!!!" isn't a long-term fundamental fix.

[Romulus Augustus]

Ummm, is that cherry or lime flavor?

[fried wylie]

hold up. they make lime koolaid now?!

[Mike M.]

Oh my God, GDP "cratered" from its June 2008 peak of around $14.6 trillion down about $700 or $800 billion a year later, or approximately five percent of GDP.

Then, an additional year later than that in August of 2010, GDP was right back to where it was before it "cratered". Now, GDP is around $15.4 billion, or about five percent higher than it was in June of 2008.

These are all official government numbers, by the way. We're all supposed to believe that our economy is on the rebound now, so according to you Keynesians and your theory of "counter-cyclical spending", it's now time to start reducing spending and cutting the deficit.

[Doctor Whom]

So effects precede causes now? That's good to know.

[fried wylie]

When dollars fly off the presses faster than the speed of light, they actually travel into the past, where they have sex with their ancestor dollars, creating financial paradoxes that are unsolvable except by giant floating brains.

Transcendental Economics 101, dumbass.

[Jordan]

Bush also inherited the housing bubble. Not that he didn't work to perpetuate it. And economic illiterate idiots like you were busy cheering him and his predecessors on because of it.

[mustard]

The president is supposed to know better than the average person. If Obama had been president then he would have known it was time to put a stop to the bubbling.

[Red Rocks Rockin]

If Obama had been president then he would have known it was time to put a stop to the bubbling.

The current student loan bubble says you're full of shit.

[fried wylie]

The president is supposed to know better than the average person.

TOP.MEN.

or, maybe you could rethink that supposition, and realize that it's the core fallacy of central planning.

He's just an Average Person himself, and will NEVER have sufficient information to "Know Better".

[Anonymous Coward]

If Obama had been president then he would have known it was time to put a stop to the bubbling.

musTARD says this even as Barry and Steven Chu attempt to inflate a solar energy bubble, all the while not realizing that China can make solar panels cheaper, faster, and with no regard to worker safety.

[mad libertarian guy]

How is it that Obama is supposed to know better how to allocate my personal finances than me?

[Pro Libertate]

When Obama loses, they're going to try to convince everyone that the election was invalid, because it's actually 2010.

[PapayaSF]

How come Congress, which actually spends money, gets no mention here? Democrats took over Congress in 2006, and did at least some things that hurt the economy (like raising the minimum wage).

[Adam330]

1) The President has to sign appropriations bills before any spending goes on, so he's a very important actor in this.
2) The President submits a budget each year, which usually varies very little from what Congress ends up passing.
3) Cult of the Presidency.

[fried wylie]

The President submits a budget each year

He does?

[fried wylie]

as commenter Hotsy Totsy already asked immediately following this post. *facepalm*

[hotsy totsy]

Wasn't Obama the president in 2009? So why do they sneak it into Bush's stats? They have Bush's first term at 2001-2004, and second term as 2005-2009.

And has Obama EVER submitted a budget?

[mustard]

The 2009 budget was decided before President Obama office. He had nothing to do with what Congress was doing until then.

[Red Rocks Rockin]

The 2009 budget was decided before President Obama office. He had nothing to do with what Congress was doing until then.

Uh, no--Bush submitted a budget that was never signed into law; the Dems wanted to add on another $400 billion and he threatened to veto. When Obama took office, he signed into law all of the spending that Bush wanted to do, plus the additional $400 billion.

[Adam330]

Some appropriations bills were signed by Bush, but not all. One of the biggest FY09 bills was ARRA, which was not only signed by Obama, but his creation.

[buntpunt]

I dont get it. That makews no sense at all dude.

http://www.Privacy-Geeks.tk

[Peter L]

Some people just do not understand the difference between the first and second derivative (or for those who never took calculus, the change of a value and the change of the change, or acceleration). Bush oversaw a huge spending spike. Then Obama oversaw an even bigger spending spike. Just becase the change in spending is down near zero does not mean that spending has gone down, it is actually still going up.

Remember when Obama took office and Liberals were proud that the rise in unemployment was dropping?

"Hey you're going to fast, we're going to crash!" Obama: "I'm only accelerating a little bit, don't worry."

[TycheSD]

Is spending as a percentage of GDP a good measure of levels of spending? After all, if the economy is growing at a slower rate because of recession, even no growth in the levels of government spending would be a higher percentage of GDP.

[youcantbeserious]

All i need to know is that the conservative posters here don't know the difference between deficit and debt. Made my day LMFAO

[Make money online]

Well, i have read this from Nutt's blog too! but well, since its Reason giving us this information, then Obama is truly on a spending Binge. Thanks for this information.