Economist Justin Wolfers tweets a graph from Mark Thoma that's very much worth talking about. It measures per capita growth in government spending for the last seven presidents' first term in office. This is what he finds:
The graph tells a simple story that I've recounted before. For all the talk you hear about Obama's historic spree, government spending actually hasn't increased so dramatically under this president. The stimulus was big, but it's over. It's been replaced by, if not austerity (which has struck our states and cities) then a hard correction to the center.
Here's another way to tell the story ... It's a quiz! I present to you the first three years in spending for three recent presidents: Barack Obama, George Bush, and Ronald Reagan. To make it a game, I've removed their names and indexed the spending increases to their first month of office. And I've replaced the dates with integers from 1-10 so you can't guess by looking at the years.
Can you guess which president is which?
President #1 President #2 President #3
The hint that solves the puzzle: They're in chronological order. It goes Reagan, Bush, Obama. Going by federal expenditures (and note these are nominal figures), it would seem that if Obama's a socialist, Ronald Reagan is Karl Marx with an ICBM.
Let me anticipate some of your objections before you make them. (1) Reagan was fighting a war, he jacked up defense spending instead of discretionary spending, and he inherited a recession with inflation that might, well, inflate his numbers. This is all true, but expanding defense was Reagan's choice, and a dollar spent, on no matter what, is a dollar taxed or borrowed. (2) Bush was fighting a war and battling a recession, too. Yes, but he has neither inflation nor a Great Recession. (3) Don't play relativity games with me, Derek, too much government spending is too much government spending, even if Obama's predecessors were worse! There is a time for government cuts, but it's not when you have 9 percent unemployment and your interest rates are below 2%. (4) The language of Obamacare and financial reform are better indicators of big government than federal spending. It's fair to measure government size by its total involvement in people's lives, but that deserves a longer post. (5) We should be more concerned about the taxes and spending to come than the spending that has past. But they haven't happened yet, so they're not part of the president's record.
Maybe I missed some objections -- I'm sure you'll let me know -- and I'll answer in the comment section.
But the bottom line is that it is really, truly time for the myth about Big Spender Obama to die. If anything, it is remarkable that, after a recession and a private sector implosion, the public sector expanded less under this administration than it did under Bush or Reagan, especially when you consider the government cuts made at the state and local levels.
