Apparently my little assault on the pro-austerity boasting from national Democrats had no effect. Because today, the official Twitter account of the Democratic Part proudly retweeted, and Democratic operatives proudly passed around, this Marketwatch story from Rex Nutting, which assesses that federal spending in the Obama era has experienced the smallest growth in real dollars in 60 years. Hilariously, the Democratic Party actually took a bigger claim from the article, not in evidence in the text, that spending is at “the lowest level in nearly 60 years.” That’s not quite Nutting’s point. But it’s not like what he’s saying here is any more favorable:
Although there was a big stimulus bill under Obama, federal spending is rising at the slowest pace since Dwight Eisenhower brought the Korean War to an end in the 1950s.
Even hapless Herbert Hoover managed to increase spending more than Obama has.
Here are the facts, according to the official government statistics:
• In the 2009 fiscal year — the last of George W. Bush’s presidency — federal spending rose by 17.9% from $2.98 trillion to $3.52 trillion. Check the official numbers at the Office of Management and Budget.
• In fiscal 2010 — the first budget under Obama — spending fell 1.8% to $3.46 trillion.
• In fiscal 2011, spending rose 4.3% to $3.60 trillion.
• In fiscal 2012, spending is set to rise 0.7% to $3.63 trillion, according to the Congressional Budget Office’s estimate of the budget that was agreed to last August.
• Finally in fiscal 2013 — the final budget of Obama’s term — spending is scheduled to fall 1.3% to $3.58 trillion. Read the CBO’s latest budget outlook.
As Nutting later goes on to say, this is worse than it implies, because you have to account for inflation and population growth. On a per capita basis, spending is down, as well as on a real-dollar basis.
This is just a rehash of what Michael Linden put together for the Center for American Progress. And it serves the same purpose – to “bust the myth” from conservatives that Obama has presided over growth in federal spending. But of course, that feeds another myth, that such restraint is a wise course in the midst of an economic recession. We know that the opposite is true, based on all the available evidence in virtually every country in the world. Just today, the head of the IMF is begging Britain to take advantage of their low borrowing costs and use fiscal stimulus to kickstart their economy.
Our borrowing costs are just as low. And so if you want to explain the sluggish recovery in the US, if you want to explain the suffering of millions of people through elevated unemployment going on its fourth year, you can use the exact same statistics and give the exact same answer – because under Obama, growth in government spending is “at the lowest level in nearly 60 years.”
I keep going back to that chart from Goldman Sachs, which was supposed to scare everyone about future fiscal policy, but which actually showed very clearly the consequences of current fiscal policy. It showed that federal policy has dragged on growth since the middle of 2010, when the Democrats still had 59 votes in the Senate and over 230 in the House. The White House remains interested to reach a grand bargain – a “balanced” deficit-reduction package – that would only add to the austerity budgeting we’ve seen for the last three years. We’ve had a milder form of austerity in the US than in places like Greece or Italy, which explains why we’re not currently in recession.
But I’m sure the Democrats will keep trying. Hopefully, the day they bust the myth will be the same day that a new recession as a result of spending cuts gets announced.