Obama spending binge never happened

[RecycleMichael]

http://www.marketwatch.com/story/obama-spending-binge-never-happened-2012-05-22?pagenumber=2

Obama spending binge never happened
By Rex Nutting, MarketWatch

WASHINGTON (MarketWatch) — Of all the falsehoods told about President Barack Obama, the biggest whopper is the one about his reckless spending spree. As would-be president Mitt Romney tells it: "I will lead us out of this debt and spending inferno." Almost everyone believes that Obama has presided over a massive increase in federal spending, an "inferno" of spending that threatens our jobs, our businesses and our children's future. Even Democrats seem to think it's true.

Government spending under Obama, including his signature stimulus bill, is rising at a 1.4% annualized pace — slower than at any time in nearly 60 years. But it didn't happen. 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.

The big surge in federal spending happened in fiscal 2009, before Obama took office. Since then, spending growth has been relatively flat. Over Obama's four budget years, federal spending is on track to rise from $3.52 trillion to $3.58 trillion, an annualized increase of just 0.4%. There has been no huge increase in spending under the current president, despite what you hear. Why do people think Obama has spent like a drunken sailor? It's in part because of a fundamental misunderstanding of the federal budget.

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.

Like a relief pitcher who comes into the game with the bases loaded, Obama came in with a budget in place that called for spending to increase by hundreds of billions of dollars in response to the worst economic and financial calamity in generations.

By no means did Obama try to reverse that spending. Indeed, his budget proposals called for even more spending in subsequent years. But the Congress (mostly Republicans but many Democrats, too) stopped him. If Obama had been a king who could impose his will, perhaps what the Republicans are saying about an Obama spending binge would be accurate.

Yet the actual record doesn't show a reckless increase in spending. Far from it.

Before Obama had even lifted a finger, the CBO was already projecting that the federal deficit would rise to $1.2 trillion in fiscal 2009. The government actually spent less money in 2009 than it was projected to, but the deficit expanded to $1.4 trillion because revenue from taxes fell much further than expected, due to the weak economy and the emergency tax cuts that were part of the stimulus bill.

The projected deficit for the 2010-13 period has grown from an expected $1.7 trillion in January 2009 to $4.4 trillion today. Lower-than-forecast revenue accounts for 73% of the $2.7 trillion increase in the expected deficit. That's assuming that the Bush and Obama tax cuts are repealed completely.

When Obama took the oath of office, the $789 billion bank bailout had already been approved. Federal spending on unemployment benefits, food stamps and Medicare was already surging to meet the dire unemployment crisis that was well underway. See the CBO's January 2009 budget outlook.

Obama is not responsible for that increase, though he is responsible (along with the Congress) for about $140 billion in extra spending in the 2009 fiscal year from the stimulus bill, from the expansion of the children's health-care program and from other appropriations bills passed in the spring of 2009.

If we attribute that $140 billion in stimulus to Obama and not to Bush, we find that spending under Obama grew by about $200 billion over four years, amounting to a 1.4% annualized increase.

After adjusting for inflation, spending under Obama is falling at a 1.4% annual pace — the first decline in real spending since the early 1970s, when Richard Nixon was retreating from the quagmire in Vietnam.

In per capita terms, real spending will drop by nearly 5% from $11,450 per person in 2009 to $10,900 in 2013 (measured in 2009 dollars).

By the way, real government spending rose 12.3% a year in Hoover's four years. Now there was a guy who knew how to attack a depression by spending government money!

[Conan71]

But spending is still 17 to 20% higher than the level in 2008. 

He's had no obligation to maintain that extra $500 to $600 billion a year yet he has and the blowback is to always blame Bush for it rising to that level.  Sorry but that's excusing bad behavior by pointing to equally bad behavior as some sort of justification.

[erfalf]

I think he is attributing the Bush tax cuts entirely to Bush, even the extension in 2010. Plus, in some of the graphs I've seen (the white house version in particular) none of the Affordable Care Act is included, because technically I guess they haven't spent it yet. Whatever.

[Gaspar]

I think he is attributing the Bush tax cuts entirely to Bush, even the extension in 2010. Plus, in some of the graphs I've seen (the white house version in particular) none of the Affordable Care Act is included, because technically I guess they haven't spent it yet. Whatever.

Funny numbers. . . They are not set to start that binge until 2013 as spelled out in Obamacare.  Quite obvious that the entire bill was engineered to present favorable numbers before a second term election.  

Now with the constitutionality of the bill in question and an expatiation of a Supreme Court overturn, we hopefully can avoid a second recession. I have no doubt though, if president Obama is re-elected and Obamacare fails, a strong attempt will be made to divert those funds elsewhere.  The health of the economy is really not a concern for this guy.

I am convinced that a second term will offer him license, as he alluded to the Russians, to act more freely in his efforts to be "transformative."  This of course is welcome by the progs, unions, and other command economy fans, but would would be problematic for us "evil" free marketers.

 

[nathanm]

He's had no obligation to maintain that extra $500 to $600 billion a year yet he has and the blowback is to always blame Bush for it rising to that level.  Sorry but that's excusing bad behavior by pointing to equally bad behavior as some sort of justification.

Are means-tested entitlements subject to appropriation? Spending is high because the economy is in the toilet and the social programs have expanded as a result. Tax revenue is low because of the extension of the Bush tax cuts (you certainly can't solely blame Obama for this) and the continued high unemployment. You may have noticed that it's the Republicans who seem to be most against the across the board cuts that will take effect early next year. They're already talking about taking a trillion dollars or more of spending out of sequestration.

Gaspar, it's amazing how you continue to be "completely convinced" of things that contradict Obama's actual record. You act like the guys who are just certain that Obama has been horrible for gun rights or that he's some sort of closet socialist even though he picks the market-based solution every time. (Save one, student loans)

[Townsend]

Gaspar, it's amazing how you continue to be "completely convinced" of things that contradict Obama's actual record. You act like the guys who are just certain that Obama has been horrible for gun rights or that he's some sort of closet socialist even though he picks the market-based solution every time. (Save one, student loans)

Remember his posts in the past about finance and politics...the predictions?

[nathanm]

Hope springs eternal, T.

[erfalf]

As the day has gone on, people are coming out of the woodwork claiming this Nutting guy doesn't have a clue what he is talking about. Be careful of the propaganda. Plus, I think people have had just about as much as they can take of the Bush comparisons. For the most part it's like saying well I'm not as much of a drunk as that guy while at an AA meeting.

[Conan71]

As the day has gone on, people are coming out of the woodwork claiming this Nutting guy doesn't have a clue what he is talking about. Be careful of the propaganda. Plus, I think people have had just about as much as they can take of the Bush comparisons. For the most part it's like saying well I'm not as much of a drunk as that guy while at an AA meeting.

Just take a look at all the mathematical gymnastics required to reach the conclusions he's coming to.  I need a nap after reading that.

[nathanm]

Just take a look at all the mathematical gymnastics required to reach the conclusions he's coming to.  I need a nap after reading that.

I realize we're in Oklahoma, but since when is addition, subtraction, and division "mathematical gymnastics"?

[erfalf]

All I can say is...There are lies, there are damned lies, then there are statistics.

I think it would be wise for the administration to steer clear of this one, since it could easily be shown with a few waves of the magic wand that he is equally as guilty of spending like a drunken sailor. If they were to go with it, how would they explain the exploding deficit. To ridicule something (Bush spending) and just let it happen anyways? I don't think that's gonna fly.

The author of this claim, admitted on the radio that he didn't have any idea what baseline budgeting was. Or the fact that all the stimulus and tarp (which was supposed to be a one time shot) ended up in the baseline of every budget going forward. You would have to ignore so many things to come up with the conclusion that he did.

Now, am I saying Obama is solely responsible for all of the spending? No. Am I saying Bush was not responsible for all that spending? Heck No. I am saying they are all spending way WAY too much money. And it is just as ridiculous for Romney to say he is one with middle America as it is for Obama to say he is a frugal spender. It is a quaint memory when hundred or two hundred billion dollar deficits used to enrage people.

[heironymouspasparagus]

But spending is still 17 to 20% higher than the level in 2008. 

He's had no obligation to maintain that extra $500 to $600 billion a year yet he has and the blowback is to always blame Bush for it rising to that level.  Sorry but that's excusing bad behavior by pointing to equally bad behavior as some sort of justification.

What??  Did you even read that??  That 17.9% was Bush's last budget!

Backsliding on our recovery?

[heironymouspasparagus]

Tax revenue is low because of the extension of the Bush tax cuts (you certainly can't solely blame Obama for this) and the continued high unemployment.


You act like the guys who are just certain that Obama has been horrible for gun rights or that he's some sort of closet socialist even though he picks the market-based solution every time. (Save one, student loans)

He woosed out horribly when he caved on letting the tax cuts extend.  If he had stood up and done the right thing, we would be in MUCH better shape now.  As proven by every recession/depression we have had for 90 years.



He has not been horrible yet on gun rights - except for his votes and actions against the people of Illinois, but that's Illinois - it's like Louisiana - who cares?  It is my strong hope that he continues to not want to walk into that buzz saw and test his "mandate" if re-elected.

[heironymouspasparagus]

I realize we're in Oklahoma, but since when is addition, subtraction, and division "mathematical gymnastics"?

Since we are in Oklahoma!  You know that....

[nathanm]

If they were to go with it, how would they explain the exploding deficit.

The deficit has not (appreciably) increased since FY09. In fact, it is now lower. Perhaps you are confusing the deficit with the debt? Personally, I don't worry much about the debt. Interest rates are low and we owe the vast majority of it to ourselves, despite all the talk about Chinese (and the Japanese before them) "owning" us.

Would I rather that we not be spending so much on foreign wars and social programs to keep people's heads above water in this stagnant economy? Why yes, yes I would. Those resources could be better used for other purposes by the government or left to the people. However, it is a great time to borrow for things that will improve our future situation. We have thousands of bridges across this country in need of repair. Tens of thousands of miles of roads. Thousands of schools. There are plenty of productive projects we could spend money on while interest is low and construction unemployment is high.

As it stands, inflation is already lower than is desirable for a robust recovery in an overleveraged environment..