"First they ignore you, then they ridicule you, then they fight you, then you win." -- Mahatma Gandhi

AP, WSJ Both Hit Obama’s Claims On Spending Growth: “Imaginary History,” “Contrary To Widespread Belief”

June 1st, 2012 by mopns · No Comments

The Obama White House continues to be criticized for its misleading (and dubious) claims on spending based on a commentary column that appeared at MarketWatch last week.

In a Saturday Fact Check, the AP wrote, “The White House is aggressively pushing the idea that, contrary to widespread belief, President Barack Obama is tightfisted with taxpayer dollars. To back it up, the administration cites a media report that claims federal spending is rising at the slowest pace since the Eisenhower years. . . . The MarketWatch study finds spending growth of only 1.4 percent over 2010-2013, or annual increases averaging 0.4 percent over that period. Those are stunningly low figures considering that Obama rammed through Congress an $831 billion stimulus measure in early 2009 and presided over significant increases in annual spending by domestic agencies at the same time the cost of benefit programs like Social Security, Medicare and the Medicaid were ticking steadily higher. A fairer calculation would give Obama much of the responsibility for an almost 10 percent budget boost in 2009, then a 13 percent increase over 2010-2013, or average annual growth of spending of just more than 3 percent over that period.”

The Wall Street Journal editors added, “[White House Press Secretary Jay] Carney the media critic deeply sourced his view to someone named Rex Nutting, who wrote an 856-word column for MarketWatch that argued ‘There has been no huge increase in spending under the current President, despite what you hear.’ Mr. Nutting claims that spending is rising at 1.4% annually, versus 8.1% for George W. Bush’s second term. How did he manage to suss out the insights that have eluded every other human being who has spent time with the historical budget tables? His accounting methods are, er, unusual.

“Mr. Nutting claims that Mr. Obama is only responsible for $140 billion worth of spending in his hyperactivist first year in office because . . . the fiscal year technically begins on October 1, 2009. Therefore he says Mr. Obama had no control over the budget, though in February 2009 he did famously manage to pass an $800 billion stimulus that was supposed to be a one-time deal. Mr. Nutting then measures Mr. Obama’s spending growth rate against an inflated 2009 baseline that includes the spending Mr. Obama caused but which he attributes to Mr. Bush. This is like an alcoholic claiming that his rate of drinking has slowed because he had only 22 beers today and 25 beers yesterday.”

Further, the WSJ editors pointed out, “The larger conceptual error of the Nutting-Obama-Carney troika is neglecting to compare the budget to the size of the economy. The best perspective on how outlays, tax receipts and deficits change over time is as a share of GDP. Those data reveal historical trends because they account for different inflation rates and include changes over society as a whole like population growth. Prior to Mr. Obama, the U.S. had not spent more than 23.5% of GDP—that was in 1983, amid the Reagan defense buildup—since the end of World War II. Yet Mr. Obama has managed to exceed that four years in a row: 25.2% in 2009, 24.1% in 2010 and 2011, and an estimated 24.3% in 2012, up from a range between 18%-21% from 1994-2008. Democrats try to explain this away by saying that the economy is lousy, so spending’s share of GDP looks larger than it would be with faster growth. But that is hardly an endorsement of Mr. Obama’s economic policies, and in any case the recession officially ended nearly three years ago, in mid-2009.”

The AP piece concludes, “So how does Obama measure up? If one assumes that TARP and the takeover of Fannie and Freddie by the government as one-time budgetary anomalies and remove them from calculations . . . you get the following picture:  —A 9.7 percent increase in 2009, much of which is attributable to Obama. —A 7.8 percent increase in 2010, followed by slower spending growth over 2011-13. Much of the slower growth reflects the influence of Republicans retaking control of the House and their budget and debt deal last summer with Obama. All told, government spending now appears to be growing at an annual rate of roughly 3 percent over the 2010-2013 period, rather than the 0.4 percent claimed by Obama and the MarketWatch analysis.”

Related:

Rasmussen Reports:50% Trust Republicans More on Economy

Comments

comments

Tags: Uncategorized

0 responses so far ↓

  • There are no comments yet...Kick things off by filling out the form below.

Leave a Comment