Three Economic Myths Busted
Posted on May 31, 2013
As a share of national income, federal spending peaked during the Reagan administration; spending has increased only half as fast under President Obama as under President Bush; and declining revenues, not rising spending, accounts for the swelling federal deficit overseen by the Bush and Obama administrations.
Those three points, provided by University of Massachusetts-Amherst economics professor Gerald Friedman, run in direct contradiction to stories heard from conservatives and the economic fear mongers who speak to them from media and Congress. Namely, that Obama is a spendthrift and that spending is the cause of the government’s budget problems.
Friedman writes: “Despite the stimulus program and demands for aid to the unemployed and to distressed local and state governments, inflation-adjusted spending has increased only half as fast under President Obama as under George W. Bush. Spending under Obama has risen at the slowest rate of any presidential administration since the 1960s, except Clinton’s. In past administrations, spending increased with higher unemployment. Had federal spending increased with high unemployment as fast under Obama as in the past, spending would have risen two percentage points faster each year. This increase, over $70 billion a year or nearly $300 billion by the end of four years, would be enough to enact another stimulus program leading to over 2.5 million additional jobs.”
Here’s how the growth in federal spending under Obama compares with growth during the eight previous administrations:
Read more about the last five decades of federal spending and revenue as a share of GDP, and the annual growth in real federal revenue here.
—Posted by Alexander Reed Kelly.
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