@TBPInvictus here

It’s a well established fact that the Obama administration has been spending like a drunken sailor since the day he was inaugurated. I first wrote about his spendthrift ways here, toward the end of 2010 (has it already been three years?).

Some time has now passed, so how’s it going? Let’s take another look at Federal government spending – including and excluding defense – for the last five administrations, indexed to 100 in the first quarter of each administration.

First the overall picture:

fgce

Now, let’s strip out the defense portion:

fndefx

Please think of these two charts the next time you hear someone say, “We don’t have a revenue problem, we have a spending problem.” Present these charts and ask precisely where that spending problem is.

What goes on at the state and local level also obviously impacts the trajectory of our economy, including GDP and our employment picture. While the Federal government does not have direct control of state and local economics, it is certainly a meaningful indirect influence, as Federal policies ripple through state capitals and subsequently through local town halls.

Here’s what that picture looks like over the past five administrations:

state and local

[NOTE: Gotta say, the degree of state and local austerity surprised even me.]

Put it all together, and this is what government at all levels has added to (or subtracted from) GDP for the past five years:

govt cont to gdp

Finally, and sadly, the NY Times ran an article last week about the deleterious effects already being felt by the recent cut in the Supplemental Nutritional Assistance Program (SNAP, otherwise known as food stamps). The damage being done to those who can least afford it cannot be overstated. Beyond the pain it is inflicting on the poor, the adverse “trickle up” effect is already taking hold:

The cuts are also hurting stores in poor neighborhoods. The average food stamps household receives $272 a month, which then passes into the local economy.

At a Food Lion in Charleston where as many as 75 percent of the shoppers use food stamps, managers were bracing for lower receipts as the month wore on.

At a Met Foodmarket in the Bronx, where 80 percent of the 7,000 weekly customers use food stamps, overall food sales have already dropped by as much as 10 percent.

“I wasn’t expecting it to be that fast,” said Abraham Gomez, the manager. Losing that much revenue could mean cutting back hours for employees, he said.

For some perspective on the SNAP program, here’s how it stacks up versus our spending on defense:

gunsvbutter

Source: BEA Table 3.12 Government Social Benefits and BEA Table 3.11.5. National Defense Consumption Expenditures and Gross Investment by Type

Category: Bad Math, Current Affairs, Data Analysis, Economy, Really, really bad calls

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.

15 Responses to “About Our “Spending Problem” (Revisited)”

  1. stonedwino says:

    The biggest spending threat has always been Republican Presidents and their administrations. Ignorance and Cognitive Dissonance dominates our dumb-ass culture and nation. Great post. Too bad the vast majority of idiots that should read it won’t. Even if they did read it, Cognitive Dissonance would negate what they saw and read…You can’t fix stupid, but can vote it out of office.

  2. ellsworth says:

    1. Interesting charting technique…i.e. comparing spending between periods using different scales on the same chart. If this is a valid and insightful technique, how about a similar plot for the revenue side?

    2. If the deficit problem is a revenue problem and not a spending problem (I think it is both), then what is your recommendation on driving more revenues? Revenues need to climb about 50% with no increase in spending to balance the budget. Since we expect <3% annual GDP growth, is the answer 50% higher taxes?

    • Angryman1 says:

      My guess expand public sector jobs and tax offshoring. That will suck up the excess labor the innovation slump has created and force capital to pay a higher going rate for the labor they buy up, releasing excess savings from the top.

      One of the big ‘funs’ of public sector contraction and private sector growth is, very little labor mobility or pressure.

      The U-3 could be 5.5% in 18 months and things would just be dandy for capital. It isn’t to you get more around 4.5% that it gets “tough”.

  3. Maseratij says:

    Absolutely …..Absolute in shining the light on hypocrisy.

    This lack of equitable distribution shows a clear lack of morality. It is sad to think of the positive effect that the defense money would have, and on how many lives. Regrettably the poor are nothing but political poker chips. They appear as the post up characters for the ever expanding government, as well as the preferred sacrifice for the defense of principles. The illustrated spending disparity ain’t workin’. Our government, founded under the ideals of Freedom and the Rights of Men, is a liberal movement. Anyone who suggests they care for the poor, more than their neighbor, has an ulterior motive. Obstruction and Obfuscation are bedfellows in the cobbling of progress. Things need to move faster, we are in the 21st Century, solutions need to come quicker, instead we use 19th Century tools and structures to solve our problems.

    The disconnect painted by TBPInvictus and the our inept solutions to our problems are connected.

  4. stonedwino says:

    Corporate real income tax rates and the amount of actual corporations that pay them are at an all time low…Corporate America ain’t really contributing dick to the pie and they suck away so much in terms of “corporate welfare”…we fix that and we will be well on our way to fixing our revenue problem.

  5. RW says:

    Pretty much what stonedwino said. The feckless fools and spavined ideologues asserting fiction is fact are pretty much the same crowd demanding that other people sacrifice or be sacrificed. At this stage it is pretty clear they don’t give a fig for contradictory data much less an independently confirmable model of how the real world works; they’ve got their story and they’re sticking to it.

    What is really interesting is how many of these folks are not only invited as expert commentators on news and talk shows but how many folks still take them seriously. It’s as if the primary qualification for expertise has become the number of times you’ve been wrong; the people who got things right — e.g., those who clearly showed why an increase in the deficit and the Fed’s balance sheet could not result in an increase in inflation or interest rates when a country was in a liquidity trap — are rarely seen and, when they are, they are given no greater credence or standing than those who got it wrong.

    • RW says:

      Parenthetically I should add that I’ve Increasingly come to believe the actual number of serious right-wing authoritarians in the USA is actually smaller than either voting patterns or revanchist red state policy suggests.

      Tea Party shocker: Even right-wingers become liberals when they turn off Fox News

      …today’s elite media also thrives on superficial coverage of controvery, which makes it complicit in generating the very extremism it simultaneous deplores, condemns and needs to hold at bay in order to legitimate itself. …

      …two central (but routinely ignored) facts of American public opinion that have remained remarkably stable since the 1960s, despite all that’s changed since then:

      1. It’s not just the center vs. the extremes; there is broad consensus across the boards on the basic contours of government spending priorities — the historically most important dimension of political opinion.

      2.It’s just that the center is not where it’s supposed to be: It’s not somewhere in between the two parties, it’s well to the left of the Democrats in D.C.

  6. 4whatitsworth says:

    I like the simplicity of this graph. It is a simple federal receipts vs expenditures bar graph in billions of dollars over time. http://www.intellectualtakeout.org/library/chart-graph/1947-2012-federal-government-tax-revenues-vs-spending

    I also like this one on Job recoveries because I believe they are coordinated.
    http://www.calculatedriskblog.com/2013/08/percent-job-losses-great-recession-and.html

    Here is the growth in food stamp spending programs.. Up 6X since 2000.
    http://www.theblaze.com/wp-content/uploads/2013/06/food-stamp-chart-2.jpg probably also related.

    This one is also a good one on the growth of the money supply our sponsor that makes this all possible.
    http://research.stlouisfed.org/fred2/series/M2/

  7. 873450 says:

    Grover – “We will make it so that a Democrat cannot govern as a Democrat.”

    http://articles.washingtonpost.com/2011-06-30/news/35233959_1_tax-cuts-grover-norquist-republican-strategy

    By Deval Patrick,June 30, 2011
    “At our 25th college reunion in 2003, Grover Norquist — the brain and able spokesman for the radical right — and I, along with other classmates who had been in public or political life, participated in a lively panel discussion about politics. During his presentation, Norquist explained why he believed that there would be a permanent Republican majority in America.

    One person interrupted, as I recall, and said, “C’mon, Grover, surely one day a Democrat will win the White House.”

    Norquist immediately replied: “We will make it so that a Democrat cannot govern as a Democrat.”

    Only a Republican can govern as a Democrat

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  9. DeDude says:

    Great update – thank you.

    I am not surprised about the austerity at the state and local level. Up until the election of Obama there was a broad agreement that during a downturn in the economy, the Federal government would give money to state and local government to avoid that they hurt the recovery with austerity at the worst possible time. I don’t think that this simple Econ 101 understanding has changed but the political consensus of priority one being economic recovery has changed. The GOP clearly stated their top priority as being to make Obama a one term president. The best way for them to do that was to try and make the economy fail. Except for the stimulus package, which just barely held them afloat, state and local government has not gotten any help from the Federal government. So I am more surprised that they have managed to not be more of a drag on the economy.

  10. VennData says:

    I take issue with all these so-called charts.

    I feel Obama is ruining Amerca. That’s all I need to know, the truth in my heart: the result of Koch Brothers, Rupert Murdock, and Rick Santelli telling me what to think. I believe the GOP is good and so it is written upon my soul. Oh and thanks dad, for raising me right and keeping me away from the liberals and all their “data.”

  11. Newb question: I honestly do not understand the y-axis. What are the units? What does ‘indexed to 100′ mean exactly? I understand that it is a baseline comparison of each administration, but is it in billions of dollars, %, or something else?

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