And don’t think that Obama isn’t going to use the analysis to clear his name and further his reelection chances. In fact, at a campaign stop last week the president boasted, “Since I've been president, federal spending has risen at the lowest pace in nearly 60 years. Think about that." Now that is an interesting comment. Obama has never wanted to be known as a spendthrift, but he sure doesn’t want to be known as the Herbert Hoover of this financial crisis either. The same Herbert Hoover who is much maligned by Paul Krugman and other Keynesians for not spending enough to prevent the Great Depression from happening. Funny thing is that under Hoover real government spending rose by 12.3 percent per year and we still had the Great Depression. According to Keynesian logic, with Obama’s paltry spending increase we should already be in another Great Depression.
The bottom line is that Obama can’t have it both ways. He can’t claim his spending has kept us out of depression while at the same time claim that his spending has been meager by comparison to other administrations.
Obama is a big spender because, Nutting’s irrelevant analysis aside, he is still outspending his big spending predecessor. Just because the rate of spending increase under Obama is small does not make him a responsible custodian of the federal purse strings. Not only has he maintained Bush’s spending spree but he has slightly enlarged it. So Keynesians can rest easy that Obama is one of them.
And of course they will claim that his fiscal policies have kept us from another depression. I don’t disagree, but Obama has borrowed more than five trillion dollars from future generations of Americans in order to do it. He essentially has traded a much needed economic correction for temporary serenity. The economy is not improving. Analysts have been warning about a double dip recession for years now. In order to maintain the charade Obama must continue to spend lavishly or the economy will collapse. At some point our current rate of spending will become unsustainable. Given that we will be many more trillions in debt and have a lot more mal-investment in our economy, the next crisis will make the last look like a walk in the park.
Article first published as Obama Has Been on a Spending Binge. on Blogcritics.
Kenn Jacobine teaches internationally and maintains a summer residence in North Carolina