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May 23, 2012 5:21 PM Spending “Binges” and Minivans

By Ed Kilgore

As I noted briefly yesterday, Rex Cutting of Market Watch created quite a buzz with a chart-loaded column showing that federal spending has been increasing at the lowest levels since the 1950s since Barack Obama got (limited) control of the federal budget. He explicitly acknowledged that his numbers excluded FY 2009, since part of that fiscal year and most of the fiscal decisions were made before he took office:

What people forget (or never knew) is that the first year of every presidential term starts with a budget approved by the previous administration and Congress. The president only begins to shape the budget in his second year. It takes time to develop a budget and steer it through Congress — especially in these days of congressional gridlock.
The 2009 fiscal year, which Republicans count as part of Obama’s legacy, began four months before Obama moved into the White House. The major spending decisions in the 2009 fiscal year were made by George W. Bush and the previous Congress.

Conservative gabbers mostly ignored Cutting’s article, until AEI’s James Pethokoukis took a wack at it, arguing that the right measurement wasn’t the rate of spending growth but the absolute levels of spending as a percentage of GDP that have prevailed under Obama and previous presidents. Bush looks better than Obama according to Pethokoukis approach because he is evaluated according to the average spending levels during his administration, not where they wound up.

Interestingly enough, Pethokoukis concedes Obama inherited “over-spending” from Bush, but argues he was a crazy spendthrift for not reversing the trends, using a very deep and highly analytical analogy:

Obama chose not to reverse [Bush’s] elevated level of spending; thus he, along with congressional Democrats, are responsible for it. Only by establishing 2009 as the new baseline, something Republican budget hawks like Paul Ryan feared would happen, does Obama come off looking like a tightwad. Obama has turned a one-off surge in spending due to the Great Recession into his permanent New Normal through 2016 and beyond.
It’s as if one of my teenagers crashed our family minivan, and I had to buy a new one. And then, since I liked that new car smell so much, I decided to buy a new van every year for the rest of my life. I would indeed be a reckless spender.

Like I said: very deep and highly analytical. I guess Pethokoukis doesn’t spend much time listening to Mitt Romney, who thinks the economy is still in terrible, terrible shape, which would indicate that if “one-off” spending was appropriate in 2009, perhaps it still might be today. More importantly, I hardly think refusing to cut automatic stabilizer spending (the main areas of domestic spending increase since 2009), particularly for safety net programs where increased spending is a matter of higher enrollments by people in need rather than higher benefits, is analogous to buying a new car every year. If you must compare it to auto purchases, I’d say keeping the old car running is a closer match. Pethokoukos also doesn’t mention that a recession depresses GDP, making spending (which is affected both by population growth and by higher demand for public services) a higher percentage even if nothing else happens. But I guess he thinks anything other than austerity represents a “binge.”

Ed Kilgore is a contributing writer to the Washington Monthly. He is managing editor for The Democratic Strategist and a senior fellow at the Progressive Policy Institute. Find him on Twitter: @ed_kilgore.

Comments

  • Ron Byers on May 23, 2012 5:46 PM:

    Reality is just hard for conservatives to grasp. When they do it makes their heads hurt.

    For years now conservatives have been told by Fox and its friends that Obama has been spending our money like a drunken sailor at a stripclub. Creating a narrative to deal with the reality of the last three years must be especially difficult for somebody like Pethokoukis. His explanation reminds me of a pre-Copernican effort to explain the movements of the planets without knowing or acknowledging that they and the Earth are all revolving around the sun.

  • c u n d gulag on May 23, 2012 5:55 PM:

    Too bad Mark Twain's dead.

    Today, he'd have written, 'There's lies, damn lies, and statistics! And then, there are Conservative statistics, which make the worst lie look like a truth told under pain of death. THEY LIE!!!"

  • JD on May 23, 2012 7:47 PM:

    Here we have the continuing question about today's GOP: stupid or disingenuous? Given that this Pethokoukis guy presumably got a pretty elite education, I have to assume disingenuous.

  • DisgustedWithItAll on May 23, 2012 7:51 PM:

    Krugman already answered any objections regarding % of GDP last summer:

    http://krugman.blogs.nytimes.com/2011/07/29/the-truth-about-federal-spending/

  • Anonymous on May 23, 2012 8:00 PM:

    Does James Pocahontas or whatever the f*ck his name is also think we need to get Dept of Defense spending back onto pre-2001 footing. Screw the minivan, Republicans bought themselves a couple dozen new tanks and because they liked that new tank smell so much decided to keep buying them. Mr.Very Serious Paul Ryan himself showed just recently how absolutely adamant he is about shoveling it down DOD's throat whether it wants the money or not.

    Does Mr.Pocahontas think we should get the DOD budget back under the $300 billion pre-911 baseline? Huh? No? No, of course he doesn't.

  • DisgustedWithItAll on May 23, 2012 8:16 PM:

    Pethokoukis is just wrong. I told him so on his website. Check out the Krugman link in my last post. Reality is just not wingnuts do. It's easier for them that way.

  • DisgustedWithItAll on May 23, 2012 8:49 PM:

    @JD: an elite education doesn't make somebody smart. His analysis of the situation is specious. Take a look at Krugman's analysis and compare to Pethokoukis'. One man is smart. The other man is not. Care to guess which is which?

  • that girl again on May 24, 2012 12:14 AM:

    Reminds me of this week's HBO's Bill Maher show where CNBC's Michelle Caruso-Cabrera offered endless market watch type talking points and cheap gimmicks throughout, clearly annoying Jeremy Skahill-- and probably the illustrious, stoic Bill Bradley-- who were also guests. She never stopped clapping her trap. It seemed like a bunch of humdrum, hackneyed, tediously repetitive and ridiculous b.s. banter that she threw out there, same broken record, stupefyingly weary and almost sickening...I thought...she looked like even she did not believe the razz she was saying, and it all was so lifeless and spiritless and dull like that dishwater waiting for me in the kitchen....

  • Neo on May 24, 2012 6:25 AM:

    Except the FY 2009 budget wasn't Bush's, the Congress held it up with continuing resolutions until Obama was sworn in

  • Tim on May 24, 2012 9:26 AM:

    Rex's last name is Nutting.

  • Colin on May 24, 2012 12:29 PM:

    Pethokoukos also doesn’t mention that a recession depresses GDP, making spending (which is affected both by population growth and by higher demand for public services) a higher percentage even if nothing else happens.

    GDP declined by 1.7% from 2008-09 and then resumed growth. That really changes nothing when measuring government spending with GDP as the denominator.

  • DisgustedWithItAll on May 24, 2012 1:27 PM:

    @Colin: Krugman's analysis I linked above elegantly and simply takes that all into account. Check it out.