JUNE 4, 2012
Government spending has gotten out of control under President Obama. You hear that argument all the time—from Mitt Romney, congressional Republicans, and conservative critics. And it’s just not true.
For a particularly good illustration of the facts, consider a pair of graphs that Paul Krugman posted on his blog Sunday, in advance of his Monday column. They show the real change in government spending—that is, how much government spending has risen or fallen, per person, properly adjusted for inflation.
Here’s one of them:
The other graph, which you’ll find on his blog, has data going back to the early 1950s. (Yet another graph, posted later, shows actual government spending as a portion of potential gross domestic product. It tells the same story.)
The most important takeaway here isn’t that Romney and his allies are, once again, manipulating the truth. It’s that austerity appears to be undermining the recovery.
That slowdown in government spending you see translates to fewer construction workers on infrastructure projects, more downsizing from state and local government, and less money in the pockets of people most likely to spend it (i.e., poor people who tend to benefit disproportionately from government spending). Perhaps you noticed the decline in government jobs in last week’s disappointing employment report.
It doesn’t have to be this way. From Krugman’s End This Depression Now!, which I wish were less timely and relevant:
The basic situation of the U.S. economy remains now what it has been since 2008: the private sector isn’t willing to spend enough to make use of our full productive capacity and, therefore, to employ the millions of Americans who want to work but can’t find jobs. The most direct way to close that gap is for the government to spend where the private sector won’t.
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