Monday, October 18, 2010

Spending Doesn't Cause Debt

Paul Krugman is at it again. He is critical of Obama for “missing opportunities,” so you cannot accuse him of being an Obamatron. What he is seems to be is such a staunch defender of government spending that he can claim, with a completely straight face, that it does not cause deficits. He can even claim that it has not “surged” during the Obama term.

The precise meaning of the term “surge” is a little difficult to pin down. Thirty thousand additional troops in Iraq is a “surge,” but in Afghanistan it’s not, so he can probably back out of any accusation that he’s full of shit. Without judging whether an increase is worthwhile or not, if annual government spending was $4.8 trillion when Obama took office, and it’s $5.3 trillion now, it has certainly increased under Obama, surge or not.

The point I’ve marked on the graph here certainly looks like a “surge” to me.
And in any case, he is not refuting the deficit argument with this spending claim, he’s merely changing the subject. In response to a charge of “Obama is increasing the deficit,” Krugman counters that “He didn’t increase government spending,” which is neither accurate nor to the point.

First of all, look at that graph. Does it look to you like spending is going down? The slope of that line in Obama’s time is precisely the same as it was during the time of Bush. Revenue was increasing or level during Bush, and it’s falling during Obama, so Obama is increasing the deficit much faster than Bush did because he is ignoring falling revenue in deciding how much to spend.

This may be necessary, even desirable, but let’s not look at government spending that has increased by 10.4% and say that “Obama has not increased government spending.”

An ostrich with its head in the sand gets its butt kicked.

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