Thursday, April 28, 2011

Data>Krugman

1 comment:

Patrick_L said...

Yes, Obama’s such a profligate spender: http://www.cbo.gov/ftpdocs/120xx/doc12039/01-26_FY2011Outlook.pdf (p.79, or in pdf language p. 97)

Besides discretionary, there’s mandatory spending. Maybe Obama’s gone crazy there. 62% is Social Security, Medicare, and Medicaid- which Obama hasn’t touched in the near-term (besides the bipartisan $250 check to seniors enacted in 2009 as a temporary stimulus provision). Another 8% is Civilian and Military retirement programs and Veterans support- unchanged. Then there’s the 15% for “Income Security,” about 10% of which goes to UI, SNAP, and the EITC & child credits- all things that respond automatically to a recession because suddenly a lot more people are unemployed and suffering from low incomes. In the recovery act as one of the temporary provisions, Obama & Congress increased the generosity of SNAP by 13.6%, working to most households receiving an additional $20-$24 per person per month. Obama increased the funding available for states to use to extend their UI programs (8.9% national unemployment anyone?). The Recovery Act changed the EITC to have a third tier of higher benefits for families with 3 or more children (before they were looped in with families with 2 children). It also reduced the financial penalty some couples received when they married (due to tax policy). He also modestly expanded the child credit to get additional money to American families. This then leaves us with the remaining 14% of Mandatory spending, an “other” catch-all category which largely consists of TARP and Fannie Mae and Freddie Mac. Those two programs’ costs spiked as a result of decisions made during the Bush Administration. So what has happened in Mandatory spending? 1) People have aged and health care costs have continued to rise, affecting the big 3 entitlement programs. No Obama impact here. 2) TARP and the bailout of the GSE’s cost a lot of money- no Obama here. 3) The 10% of all mandatory spending under the income security category grew naturally as a result of the recession (spending which shouldn’t be attributed to Obama, unless the decline in revenues as a result of the recession also earns Obama the title of greatest tax cutter of all time). Obama did expand several of those programs temporarily as part of the stimulus and later extension- but since these elements are so small and the Obama expansions were so modest, this literally has an impact of a fraction of a percentage point of GDP.

In conclusion, there hasn’t been a dramatic expansion of spending under Obama. Conservatives always fail to cite exactly where Obama has been dramatically increasing spending. The American Spectator article inadvertently makes clear the point that Obama hasn’t been doing anything to spending- Medicaid is getting hammered by 3 factors 1) aging population 2) rising health care costs 3) recession causing more people to qualify. The Everything else category largely consists of Social Security and Medicare, which are worse now than the last two Bush years because the trends in these programs are growing so much faster than GDP growth which has gotten extremely slow recently. After that, the major factor is TARP and Fannie Mae/Freddie Mac- Bush Administration decisions having a cost under Obama’s term. The only thing significant changes Obama has done is in income security, but those increases pale in comparison to the impact of the recession.

Krugman=correct=date>uninformed conservatives. I would like to start seeing specific examples of Obama’s massive increases in government spending, something conservatives are loath to do… because they know they don’t exist and they prefer to stick to the talking point that Obama has been massively increasing spending when that is factually incorrect. Yet people continue to lap it up. Where’s the beef?