My recent Hey, Big Spender piece (the third in a series, it turns out) drew a fair amount of hyper-partisan commentary. Most of it followed BR’s Comment Caveat almost to the letter.

However, it was at another website that, after years of blogging, I was finally busted. Yes, I was called out on the “intentionally misleading crap” that I posted. In an effort to redeem myself, herewith my mea culpa.

It was pointed out in comments and at the website that busted me that the series I ran – Real Government Consumption Expenditures & Gross Investment (GCEC1) – is not all-inclusive. I neglected to say that in my post, figuring that those who clicked through to the Krugman post I cited might notice that he slyly slipped this in (emphasis mine):

Here’s another indicator. Look at government (all levels) purchases of goods and services, that is, actually buying stuff as opposed to transfer payments like Social Security and Medicare.

So, those sharpies who read Krugman’s post with an eagle eye might have gleaned – maybe – that GCEC1 does not represent the totality of government spending. The point, of course, was to capture what we might refer to as “core” government spending – what my critic rightly refers to as “bullets (and rifles) bought for the defense department, the toner cartridges for the printers, check stock for the Treasury, computers for the offices, drugs and supplies for doctors and “investment”, such as building new buildings and renovating old ones, building roads and bridges and similar.” Exactly the point – the things over which an administration arguably has some measure of control, and exactly the reason that series was relevant to the post. It was an attempt to capture government spending ex- things like the big three.

To demonstrate exactly how fraudulent my post was, my critic put up a chart of…well…he put up a chart of the same series I used, except un-rebased, which accomplished nothing. There is actually no fact-based or data-driven rebuttal to what was presented in my prior post, or that of Professor Krugman, just a fair amount of bluster. So, being as this is a mea culpa and all, I’m going to do his homework for him and demonstrate exactly how wrong I was.

First things first: My critic says that actual government spending is roughly $3.8 trillion. I assume he’s looking at Federal Government: Current Expenditures (FGEXPND), which peaked out a year ago at about that $3.8 trillion level ($3.8295, to be exact). So let’s pull back the lens and see how the Obama administration is doing on that metric and view what I like to refer to as the Whole Enchilada:

 

 

It’s a sure bet that Obama’s almost immediate near-vertical rise is stimulus related [BR: What about ongoing GSE Bailouts?]. And now, well, you can just see for yourself that he’s spending like a drunken sailor, just like that bastard Clinton did. So, there’s your “all in” chart. Any criticism of Obama’s spendthrift ways should start with an explanation of that red line relative to the other four (well, three, actually, since Clinton was a loser with a capital “L”).

My critic (correctly) points out of the series I used: “Left out are all the other expenses — things that are not consumption.  Like salaries.  Like transfer payments such as Medicare, Medicaid, welfare and Social Security, other than physical direct consumption in those programs.

Yeah, well, let’s just see about that, shall we*:

For the 30,000-foot view, here are the Big Three from 1970:

(charts and analysis continue after the jump)

 

 

Now, a look at each, indexed to 100 at presidential inaugurations:

(Source: FRED, author calculations)

 

It took a little digging and a call to BEA to track down “salaries,” but I did find it (Tables 6.2.A to D):

 

 

There is no series I could find defined as “welfare,” so I’ll leave it to my critic to do that little bit of homework. After all, I’ve done all the heavy lifting.

So, Mr. Denninger, please either refute the data I’ve presented here (all the series are identified), issue a correction/retraction/apology at your site, or accept that you were simply blinded by ideology. It does not sit well with me to be accused of fraud.

Finally, on a related note, it might be constructive to update a chart I first ran on a similar theme some time ago:

 

 

Final note: Here is how BEA defines Government consumption expenditures and gross investment: “The value of services produced by government, measured as the purchases made by government on inputs of labor, intermediate goods and services, and investment expenditures. It is the sum of government consumption expenditures and government gross investment.”

 

See also: Catherine Rampell, NY Times: “Government spending has fallen for six straight quarters as Recovery Act funds have been exhausted and state and local governments have struggled with tax revenue shortfalls. Accordingly, the public sector has been shedding workers relatively consistently since the recovery officially began in mid-2009, with the exception of a brief spike of temporary hiring during the decennial census.”

Floyd Norris, NY Times, Government is Getting Smaller in the U.S.

I have not read Chris Turner’s critique, Rebutting Paul Krugman: The Rest of the Story, but its on my list of weekend reading.

Fraudulently yours,

@TBPInvictus

 

 

__________________

* I will certainly stipulate that any series presented may have been subject to legislative and/or accounting-related changes. For example, Reagan’s Medicaid line starts off somewhat noisy and then becomes remarkably smooth. Similarly, Bush I’s Medicaid line looks a bit anomalous. If anyone is aware of specific legislation or accounting changes that may have (or did) impact any of those series, please advise in comments. That said, the numbers are exactly as downloaded from FRED.

Category: Data Analysis, Economy

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

55 Responses to “The Surprisingly Shrinking Government Footprint”

  1. Entrepreneur says:

    Getting mired down in an argument about which legacy political party is least/most culpable misses the point. What’s interesting about those charts – especially the first one (FGEXPND) – is that they all increase relentlessly, even after being indexed.

    Just eyeballing that first chart indicates that, regardless of party, Presidents are lording over consistent growth rates in federal expenditures of ~25% per four year term. That implies a doubling about every three terms or so.

    There’s your problem.

    These arguments about who is worse, especially by focusing just on the Executive branch without “look back” context (Congress? Macro landscape? Bubble-blowing?) – are just plain distracting.

    And this doesn’t even count State, County, or Muni spending growth.

    We don’t have a party problem. Unless by “problem” you mean that both parties suck.

  2. boogabooga1114 says:

    Since toner cartridges and even F-35 jets have become such a relatively small share of total government expenditures, count me among those skeptical of the importance of breaking out that figure as a clue to “real” government spending.

    But thanks for the update. That first chart — fascinating.

  3. Pantmaker says:

    My adult ADHD would never have allowed such a thoughtful and measured response backed by beautifully detailed research and analysis. Thank you kind sir *slowly bows at the waist*

  4. mark says:

    Great stuff. Thanks for all the effort. Sadly it won’t change any minds. As usual PK says it better than I ever could:

    http://krugman.blogs.nytimes.com/2012/05/05/economic-tribalism/

  5. Greg0658 says:

    “critic (correctly) points out of the series I used: Left out are all the other expenses — things that are not consumption. Like salaries. Like transfer payments such as ”

    imo above expense is just a transfer* – unless transfer is spent outside the USA on a vacation or a foreign made product … salaries likewise – our issue is that government job could be my job if we had to all fight for it in a FMCitBPtP world – which I still think monopolies have their benefits when we are not fighting over scraps

    welfare supports inflation I agree – tell that story in the hills breeders*

    and that BIG government expense OIL – I have no assistance to offer

    * transfer with benefits – some tax kickback

  6. Conan says:

    Ok, let’s use another analogy. Let’s say I have a decent job, but a few years of high expenses, new house, new car, college tution and my parent got sick and i had to pay the bills.

    So using this logic that even though I lost my job, but was “lucky” enough to find another at 80% of what I was making with less benifits. I am managing my finances well if I just keep spending the same as before?? I doing good to keep boring more money to by a second house and car???

    There is no benefit or logic to adjusting to what I make or paying off debts?? Maybe I should put my oldest kid back to work and get a second job (at least that would be more productive than raising taxes)

    Bottom line you can calcualte all the numbers to amaze the folks that you want. Why don’t you spend your time saying how we can live within our means? Why can’t you use your math skills to explain how we’re going to pay off our debt?

    No, the easy solution for you is raise taxes, borrow more money and spend baby spend!!!!!!!!!

    ~~~

    BR: I find it interesting that rather than deal with the subject at hand, you prefer to make a case against a different argument (not made here) about a different issue. Think about your own cognitive processes and get back to me.

  7. G3 says:

    I echo “Entrepreneur”‘s thought that to actually argue which President spends a bit more or a bit less is totally silly. So perhaps I sounded like I was defending the Republicans or even Bush 2 when I doubted the data last time.

    I have no intention to defend the spending records of previous Presidents. There are a lot more data series in the current post. But to me they still don’t demonstrate the whole picture. How do you reconcile those data series with the following record?

    Deficit to GDP Ratio
    1980 2.65%
    1981 2.53%
    1982 3.93%
    1983 5.88%
    1984 4.72%
    1985 5.03%
    1986 4.96%
    1987 3.16%
    1988 3.04%
    1989 2.78%
    1990 3.81%
    1991 4.49%
    1992 4.58%
    1993 3.83% Clinton
    1994 2.87%
    1995 2.21%
    1996 1.37%
    1997 0.26%
    1998 -0.79%
    1999 -1.34%
    2000 -2.37%
    2001 -1.25% Bush 2
    2002 1.48%
    2003 3.39%
    2004 3.48%
    2005 2.52%
    2006 1.86%
    2007 1.15%
    2008 3.19%
    2009 10.13% Obama
    2010 8.90%
    2011 8.61%

    To me, they (new data series in the current post) still don’t prove Obama spend anything less.

    I have no doubt Obama inherited a dire economic environment which Bush 2 was chiefly responsible. In fact I believe most people, include most Republicans, are embarrassed by the record of Bush 2′s 8 years.

    But Obama did not spend anything less. Obama is NOT the solution. (BTW, neither is Krugman. He is entirely clueless.)

  8. G3 says:

    Barry,

    It helps if you can upgrade your comment section to allow (1) edit (2) reply (3) notification.

  9. Goldilocksisableachblond says:

    Denninger has no business accusing others of having ideological biases.

    A few years ago , I posted a note here outlining how a 10-fold math error in a piece by Denninger exposed the way his analysis is skewed by his own biased worldview. One of his forum members pointed out my post to him , and he quickly corrected the post , but nowhere to be found was any apology for letting his politics distort his analysis.

    Here’s a copy of the original showing the error in his table ( about 2/3 down the page ) :

    http://tinyurl.com/7q69wf7

    After showing debt growth during the 1960′s that was mis-stated by a factor of ten , he comes to the following conclusion based on analysis of his own ( faulty ) data :

    “Yes, before you ask, the 1960s decade is accurate – the entirety of “economic growth” in the 1960s was not production – it was debt. It should now be clear to you why what happened in the 1970s with interest rates and inflation occurred! Those events had exactly nothing to do with Nixon closing the Gold Window – rather, it was the expected and perfectly-predictable outcome of the 1960s debt orgy!”

    A copy of the corrected post can be seen here :

    http://tinyurl.com/86dgkkj

    Here’s his retraction , at the end of the post :

    “Edit: 1960s DTi had a misplaced divisor – corrected and paragraph referencing “nutty Ponzi” in that decade removed.”

    The original BP post pointing out the error :

    http://www.ritholtz.com/blog/2009/12/stiglitz-6-harsh-lessons-we-failed-to-learn/#comment-245090

    Since then , I’ve learned that the last thing I can expect from Denninger is ” just the facts , ma’am “.

  10. Joe Friday says:

    Entrepreneur,

    What’s interesting about those charts – especially the first one (FGEXPND) – is that they all increase relentlessly, even after being indexed.

    As does the population.

    There’s your problem.

    No, actually, lack of revenue is the “problem”.

    With taxes the lowest since the 1950s and tax receipts recently at 1950s levels, spending, in other than a few areas which I’ve delineated previously as a distant second, is NOT the “problem”.

  11. Malachi says:

    Nice work Invictus.

    And Entrepreneur it is relevant because if you have accurate information it changes the conversation from blame and shame partisan politics to something more like objective problem solving. If Obama is not the root of this particular problem then the search for the solution changes. That is very threatening to some people.

    G3 regarding deficit to GDP, pretty fascinating stuff. Is that purely as a result of lagging growth in GDP and tax receipts? And what do you do in that situation? Cut spending further? What are the consequences of doing that during a major downturn?

  12. MayorQuimby says:

    Not nice work Invictus.

    Debt to gdp is rising.

    Interest payments are rising (minor exception for last year).

    Liabilities rising.

    Food stamp usage rising.

    Look….you are *spinning*. You may also be talking your book.

    The simple fact is that the US balance sheet is not only not sound but is DIRE. We are literally going broke, have negative real rates, savers being pillaged to fund endless deficits and QE and it will only get worse as long as people such as yourself have the mic.

    I long for the day when all this bs is consigned to the dustbin of history and we get back to old school, boring real-world growth after the whole leveraged casino cheal liquidity era is finally put to sleep.

    And it will happen or we will hyperinflate into an even worse kind of collapse.

    Invictus: Calling Strawman – you raise several issues, not one of which was the subject of either of my recent posts.

  13. RW says:

    I was taking G3 seriously and thinking I might have to do some investigation into the validity of GDP to deficit ratios as an indicator of policy impact rather than, say, timing luck or a better Fed but then I read the misrepresentation of Obama’s spending record and the gratuitous swipe at Krugman (whatever he is it is certainly not clueless) at the end and decided G3 was probably just another right-wing crank indulging in gish gallop* and one-single-proof** rhetorical games.

    But at least that frees my afternoon for more productive tasks so that is a good thing.

    * http://rationalwiki.org/wiki/Gish_Gallop
    ** http://rationalwiki.org/wiki/One_single_proof

  14. Joe Friday says:

    G3,

    How do you reconcile those data series with the following record?

    Utilizing “as a percentage of GDP” was fine prior to 2007, but since, it’s apples and oranges. As has been presented here and by DeLong, Krugman, and others, fractions have denominators.

    &

    MayorQuimby,

    Debt to gdp is rising.

    Same response.

    The simple fact is that the US balance sheet is not only not sound but is DIRE.

    We had TRIPLE the deficits during WWII, which of course was followed by a top tax bracket of 91% under Eisenhower.

    We KNOW what works and what doesn’t.

  15. techy says:

    Invictus.

    Full credit and kudos to you to try and engage in a debate about real issue. I have given up about two years ago when I realised that repubs only claim fiscal conservatism because claiming (1)Religion based law and (2) Racism based support for politicians does not look good to educated bigots.

  16. Paly says:

    How does the above analysis reconcile with total outlays, which have been rising?

    In the same chained 2005 dollars:

    2007 (pre-recession): 2.564 trillion
    2010: 3.081 trillion
    2012: 3.212 trillion

    Table 1.3 http://www.whitehouse.gov/omb/budget/Historicals

  17. MayorQuimby says:

    Joe Friday.

    Weak attempt.

    We are not in a post WW2 environment in which we have the only intact manufacturing base and the entire world needs to rebuild.

    Regardless, debt to gdp is a ratio, a percentage and that is ALL that matters.

    Finally, that is ONLY public sector debt and does NOT account for tens of Trillions in unfunded liabilities NOR does it accunt for many Trillions more in private sector debt.

  18. webmartians says:

    (apologies for the puns)
    Zooming down to ground-level, apply all of these debt musings to something as concrete as building an Interstate or highway.

    Are you suggesting that, instead of building interchanges everywhere, we should build rotaries/round-abouts (much cheaper)?

    …or are you proposing that we don’t build Interstates at all?

    When is frugality belt-tightening, and when is living-within-means really no more than divestment or, even worse, retraction?

  19. DeDude says:

    If the debate is about “big spending” politicians then you clearly have to take social security out of the picture and also most of medicare. Those are insurance programs that people have paid for and not discretionary spending that politicians can decide to do, or not do, from year to year. The original Krugman post was whether government was actually stimulating the economy by increasing the type of spending that would be directly stimulative or contracting the economy with austerity measures by reducing such spending. The transfer payment should be excluded not just because they are in short term out of control of the government, but also because their potential stimulatory effects are not controlled by government (grandma can spend or save her SS check, without asking anybody first). The question was whether government (and Invictus extended it to under the 5 past presidents) were increasing discretionary spending, purchasing things and directly expanding the economy, or decreasing discretionary spending and contracting the economy. The idea of Obama as the “big spender” who has been increasing discretionary spending is totally false. The explosion in the deficit is mostly a result of reduced tax (income) not increased spending. Except for the stimulus Obama has been much more of a slasher of government spending than any of the other previous presidents. So the “big spender” meme is a big fat lie and I commend Invictus for putting some numbers and some names on that lie.

  20. Joe Friday says:

    MayorQuimby,

    We are not in a post WW2 environment in which we have the only intact manufacturing base and the entire world needs to rebuild.

    You’re still regurgitating that lame argument ?

    Regardless, debt to gdp is a ratio, a percentage and that is ALL that matters.

    Nope.

    Fractions have denominators.

    It’s an utterly meaningless metric within that context.

  21. DeDude says:

    Japans debt to GDP is also a ratio. What was that ratio in 1995, 2000, 2005, 2010? – and have they fallen into the abyss yet? I guess that a domestic entity (whether its the population or the central bank) that will purchase all the debt that is issued by the government DOES make a difference – even if it is hard to understand for those who think we are somehow still operating a “gold standard” kind of economy.

  22. Greg0658 says:

    “The debt gap between top earners and everyone else continues to grow. Diane Swonk and Ken Rogoff explain why personal debt matters to the broader economy.”
    http://yourmoney.blogs.cnn.com/2012/05/05/debt-inequality-the-new-income-inequality/

    not sure if Krugman is in this clip or the next not provided, but the banter was still good onT
    (Krugman may have been an insert piece to get everybody going)

  23. r says:

    if you are open to the pure (unfiltered) facts, watch this

    http://www.youtube.com/watch?v=EW5IdwltaAc&feature=player_embedded#!

    This takes the budget numbers directly from the gov reports: Revenue in – Spending out….with the difference made up with debt. No filtering like you have done.

    Please next read this…. as a way to open your mind pretend you are not a liberal or a conservative, http://www.ritholtz.com/blog/2012/04/a-willingness-to-be-influenced/

    Why argue the point that Obama has been deficit spending less than perhaps Reagan? It’s done! We’re in debt.

    Rather than trying to apply blame with statistics (biased by your personal political bent), wouldn’t it be great to find someone , somewhere with vision to help us get out of this mess?

    is your point that Obama sucks less than Reagan? so what?

    When i look in the eyes of my 3 kids who will have to somehow pay back this debt (Fact: all of the $ taken in from evil corporate taxes is not enough to pay our federal interest), i really am worries.

    this post tries to convince me i can at least say…. – “dont blame Obama, blame Reagan”

    gee thanks

    Invictus: “Why argue the point that Obama has been deficit spending less than perhaps Reagan?”

    That’s not at all what this is even about.

    is your point that Obama sucks less than Reagan?

    No. That is not my point.

  24. stonedwino says:

    For all you bloviators that believe Obama actually increased Government spending. Not! Talking points are not the same as facts.

  25. techy says:

    Personally I believe this country is not ready for a black president yet. I hope romney wins the WH but senate or congress goes the democrats way. I am sure the democrats will co-operate with whoever to get the country out of this mess. All this fiscal and deficit talk is bull shit. As long as we are the world’s reserve currency and we can borrow at <4%, you are freaking out of your mind not to spend on infrastructure and your people.

  26. Entrepreneur says:

    Joe Friday,

    You commented:

    “What’s interesting about those charts – especially the first one (FGEXPND) – is that they all increase relentlessly, even after being indexed.”

    As does the population.

    At a rate of 25% every four years?

    No.

  27. 873450 says:

    “There is actually no fact-based or data-driven rebuttal to what was presented in my prior post, or that of Professor Krugman, just a fair amount of bluster.”

    If bluster works facts and data are unnecesary.

  28. Petey Wheatstraw says:

    Invictus don’t take no shit.

    Good smack down.

  29. leveut says:

    I have to say that I don’t quite understand what the point is here or the argument.

    It appears that “Invictus” set out to “prove” that Obama is not a big spender.

    It also appears that the “proof” of that is to show that other presidents, especially Republicans, spent more than Obama when calculated on some basis.

    I suppose that is a noble and civic minded effort.

    But what I don’t quite understand is how “government spending on _____ indexed to 100 at inauguration” actually proves that in reality.

    If, for example, federal spending at inauguration of President A is $500B and it increases $50B the next year, that is a 10% increase.

    If federal spending at inauguration of President E is $5 Trillion and it increases $250B the next year, that is a 5% increase.

    “Invictus” seems to be arguing that because E only increased spending by 5% while A increased it by 10%, A was the spendthrift not E, notwithstanding that E increased actual spending five times as much as A.

    Is that his point? Is that actually what his argument is?

  30. Greg0658 says:

    maybe its the margaritas and the CoorsLt but has this blog been taken over by the lunatic fringe tonight :-|
    (I’ll recheck after sleepoff)

    “this country is not ready for a black president yet” ? sorta agree – aeiou & some say y
    D-Obama is malato (he says not – so)
    R-Romney is white corporatist (wasp ? wasgp ? not sure if there’s a nomenclature yet)
    AE (americans elect) – haven’t selected a 3rd party candidate yet – caucus1 is May8 – & (by rules) ?-Buddy Roemer (looks like he has it – top candidate advances to round 2of3 with kudos)

  31. RW says:

    @leveut, in better times you might get the benefit of clarification as well as benefit of the doubt but in this era of right-wingnut agnotology and agitprop the answer to your moderately grotesque but otherwise unoriginal straw man is probably best given as no, that was clearly not his argument and only a hardened ideologue and/or utter jackass would attempt to claim otherwise.

  32. FrViper says:

    Well ‘darn’! Guess we’ll have to blame Congress for the est. 25% annual increases. Now can we get them to stop spending and renegotiate our ‘entitlements’ to reflect real costs where we pay in the actuarial realities of Social Security and Medicare/Medicaid? I’m not holding my breath!

  33. brianinla says:

    So, over the last three decades entitlement spending is consuming more and more of the budget. And so on a percentage basis discretionary spending goes down as entitlement spending approaches the asymptote of total revenue. And yes, I know your argument is to borrow more to spend on infrastructure and the like, however I’ll argue against it because Congress simply doesn’t allocate money to ‘do the right thing’. Let’s face the reality of the government we have, which is totally corrupted on both sides of the aisle. The only way to reign them in is to force them to make tough budget choices. Unchecked deficit spending gave us exactly the federal government we have today.

  34. Jim67545 says:

    Somewhere in there (Clinton?) there was a lot of expense shifting to the States. That aside, at the huge political risk it would be, wouldn’t it be nice to hear the President (or his opponent) express a PLAN for the economy? And, I’m talking about a step-by-step plan not an assemblage of coulda’s or shoulda’s.

    I know it is dry stuff and the media would probably instead report what color tie he wore but… it might extend the debate from pointless discussion of what will happen if we continue doing (waging war, borrowing money, enrolling SS disability, drilling moratoria, etc.) ad infiniti. Perhaps we are (or should be) applying stimulas now and perhaps we should withdraw it later and switch to more austerity. Are we incapable of thinking in the context of time? Aside from the gridlock in Congress, shouldn’t we at least see if we have some method to this madness and expose it to public scrutiny/debate? Might not some of the polarization dissipate if the plan includes dealing with the debt problem in some way at some point instead of a million chicken littles running around tearing out their hair?

  35. willid3 says:

    i always wonder why those who think cutting spending is the solution aren’t looking at the countries who have, and crowing about their success. the biggest example of this is Ireland. course its really hard to find any success. maybe thats why they don’t mention it?

  36. HarleyHoward says:

    I hope you people enjoy yourselves – fiddling while Rome burns. Deficits, growing debt and printing money to service the debt and buy more of it has an inevitable result you are all trying to ignore.
    Common Sense from the Heartland – http://howardwemple.com

  37. Joe Friday says:

    Entrepreneur,

    At a rate of 25% every four years? No.

    We agree, you don’t comprehend the data.

  38. Joe Friday says:

    FrViper,

    Now can we get them to stop spending and renegotiate our ‘entitlements’ to reflect real costs where we pay in the actuarial realities of Social Security and Medicare/Medicaid?

    Those are not the drivers of our federal deficits.

  39. Joe Friday says:

    brianinla,

    The only way to reign them in is to force them to make tough budget choices.

    Which should involve reversing the policies that are overwhelmingly responsible for the federal deficits & debt, no ?

    Unchecked deficit spending gave us exactly the federal government we have today.

    Nope.

    According to the independent non-partisan Congressional Budget Office, the federal budget deficits & debt are overwhelmingly as a result of the MASSIVE decline in federal income tax revenue caused by the numerous rounds of tax cuts that overwhelmingly benefited the Rich & Corporate enacted by Chimpy Bush and the Republican Congressional Majority.

  40. carleric says:

    I think most of the controversy or disagreements stem fromthe fact that numbers do not exist in a vacuum….those defending the failed policies of Keynesian modeling or defenders of Paul Krugman or fighting the last war. It is time to move on. My belief is that the worst way to spend any money is to involve governemnt in the decision making process but in this age of acceptable sociaslism I realize that stance is unpopular to most people above tyhe age of, oh say, 35-40.

    ~~~

    Invictus: Hard to move on until people understand the facts at hand, including the fact that Keynesian policy has hardly failed. Keynesians warned well in advance that the stimulus package was too small and somewhat ill-constructed. Hence, it could only somewhat mitigate the disaster, not reverse it. None of that is controversial.

  41. bart says:

    And this one is still missing that I posted the last time:

    http://www.nowandfutures.com/images/debt_only_last_five_presidents.png

  42. willid3 says:

    also a note. some look at the future unfunded liabilities. and while we can’t even predict what next year will look like, its not realistic to look at what might be true. 70 years out.

    now if we did the same exercise for any business that ever existed. maybe we can start with Apple. if we look at their future liabilities 70 years out. we can say they are bankrupt since they can’t afford them

  43. Bridget says:

    Paul Krugman didn’t think Bush spent like a drunken sailor, http://krugman.blogs.nytimes.com/2008/02/02/federal-spending-mythology/, although plainly he did.  But if one wishes to “demonstrate”, that Obama is not spending like a drunken sailor either,  although plainly he is, the bloated budget of the Bush years, at the height of the Iraq war, makes a dandy baseline from which to calculate Obama’s rates of increase.  Much better than inflation adjusted dollars, percentages of GDP, debts, deficits, and other such methods of calculating the spending of drunken sailors.

  44. deanfv says:

    Sounds like bullshit. Debt to the Penny stats paint a completely different story:
    01/20/2009 total debt was $10,626 trillion

    05/03/2012 total debt today $15,671 trillion

    Obama’s “austerity” resulted in a debt figure that is 47.5% higher, and he’s not done yet!

    OMB Data shows that Federal Outlays as a percentage of GDP is at the highest level it has been since 1946.

  45. Greg0658 says:

    “the worst way to spend any money is to involve governemnt” .. that statement is agreeable on its face – until you think thru how private business gets awarded contracts … and add another layer: degree of difficulty in the 21st century to become a competitor
    ~~
    beaver dam theory (again) .. I guarantee when the damage hits a ‘state’ of turnover the dam will break and all will return to happy days under the Henry Ford theory:
    “There is one rule for the industrialist and that is: Make the best quality of goods possible at the lowest cost possible, paying the highest wages possible.”

  46. Joe Friday says:

    Stunning how many STILL cannot delineate between apples and oranges.

  47. perra says:

    Entrepreneur Says:
    “Getting mired down in an argument about which legacy political party is least/most culpable misses the point. ”

    Come to China and you won’t have this type of “argument” at all.

  48. leveut says:

    This is directed to: RW May 6th, 2012 at 12:54 am [@leveut, in better times you might get the benefit of clarification as well as benefit of the doubt but in this era of right-wingnut agnotology and agitprop the answer to your moderately grotesque but otherwise unoriginal straw man is probably best given as no, that was clearly not his argument and only a hardened ideologue and/or utter jackass would attempt to claim otherwise.]

    As I said, I am puzzled as to what “Invictus’s” point is and how he supposedly “proves” it. I merely asked a question.

    From your intemperate and rather stupid response, I can only guess I hit close too close to the mark.

    Nevertheless, I remain puzzled as to what he intended as it is not clear to me what it is, other than to flame some other blogger somewhere who flamed him.

    I seldom revisit any discussion thread here because it is too much work to find where I posted and, given the general quality of the posts as illustrated by “RA” is pointless, nevertheless, I remain puzzled and repeat my questions:

    ———

    I have to say that I don’t quite understand what the point is here or the argument.

    It appears that “Invictus” set out to “prove” that Obama is not a big spender.

    It also appears that the “proof” of that is to show that other presidents, especially Republicans, spent more than Obama when calculated on some basis.

    I suppose that is a noble and civic minded effort.

    But what I don’t quite understand is how “government spending on _____ indexed to 100 at inauguration” actually proves that in reality.

    If, for example, federal spending at inauguration of President A is $500B and it increases $50B the next year, that is a 10% increase.

    If federal spending at inauguration of President E is $5 Trillion and it increases $250B the next year, that is a 5% increase.

    “Invictus” seems to be arguing that because E only increased spending by 5% while A increased it by 10%, A was the spendthrift not E, notwithstanding that E increased actual spending five times as much as A.

    Is that his point? Is that actually what his argument is?

    ———————————————–

  49. [...] a guest blogger at Barry Ritholtz’ Big Picture blog on the stock market and economics, decide to take a look at the assertion. The Bureau of [...]

  50. NoKidding says:

    “indexed to 100 at inauguration” (retard)

    Still a dumb way to look at this data. The last time Invictus posted this, it was a shorter version of the same mistake. Should Research in Motion fix itself by indexing versus Motorola?

    The current rate of deficit spending has pushed accumulated nominal debt past the point where a rational human could expect it to be paid back in dollars near todays real value. Since we have a monetary and fiscal union, we are now determining the inflation factor that will eventually be used to fix the problem.

    ~~~

    Invictus: No, RIMM should not fix itself by indexing vs. MOT, and nothing remotely resembling that has been the topic of discussion here. This is about the unfounded claim that Obama is an out-of-control spender. My approach to looking at this issue was to compare percentage increases/decreases over time, which seems like a fair enough exercise.

    Your final point is also a separate matter, and not the topic of discussion in this post.

  51. Joe Friday says:

    GOOF GRIEF.

    Caught an interview of Rogoff being asked why the national economy is slowing again. His response was “the debt and uncertainty”.

    Just what planet is this guy orbiting ?

    If “the debt” was an issue, interest rates would be spiking. The 10-year treasury just went NEGATIVE, and that’s not the TIP.

    McClatchy revently documented that the problem is NOT “uncertainty”, or “taxes”, or “regulations”, or any of the other RightWing talking points, it is LACK OF DEMAND. There is a lack of demand because we just lived through witnessing a big chunk of the Middle-class being pushed down into the Working Poor, while the rich got even richer.

  52. leveut says:

    So.

    In response to NoKidding Says: May 7th, 2012 at 10:30 am we have:

    “Invictus: No, RIMM should not fix itself by indexing vs. MOT, and nothing remotely resembling that has been the topic of discussion here. This is about the unfounded claim that Obama is an out-of-control spender. My approach to looking at this issue was to compare percentage increases/decreases over time, which seems like a fair enough exercise.”

    I finally got an answer to my question.

    ““Invictus” seems to be arguing that because E only increased spending by 5% while A increased it by 10%, A was the spendthrift not E, notwithstanding that E increased actual spending five times as much as A. Is that his point? Is that actually what his argument is?”

    In fact, I was correct. That is his point. That is his argument. Really really stupid, but there you are.

    And the poster calling himself “RA” has shown himself to be a flaming fucktard.

    Invictus: Ordinarily, I’d be curious as to why someone has a problem with a concept as simple as rebasing. However, since you’ve repeatedly shown yourself to be a douchebag, I have no such curiosity in this case.

  53. bonzo says:

    What matters isn’t the facts, but the interpretation of the facts. And when it comes to interpretation, everyone is entitled to their opinion.

    Thank you for letting me say the last word on this subject.

  54. [...] on a previous matter, Karl Denninger  posted what is supposed to pass for a rebuttal to my recent post on government spending. To my eyes, as Jay Bookman so aptly put it, it looks like “the octopus trick, squirting [...]

  55. [...] And they used that chart anyway. Mind bending – I actually could have used their chart in my May piece demonstrating Obama’s relative frugality. To their credit, though, they do get one thing [...]