Saturday, July 14, 2012

Language Abuse and the Federal Budget

Sometimes people use misleading titles to try to make an assertions that is not supported by the facts. Shocking, I know.

This article in Forbes - "Who is the Smallest Government Spender Since Eisenhower? Would You Believe It's Barack Obama?" is a good example.

The phrase "Smallest ... spender" gives the impression that less money is being spent under Obama than under any other president since Eisenhower.


What he's actually talking about is the percentage change. The title is misleading. It should be "Who increased government spending least over his predecessor's last budget."

Percentage change tells us nothing about how much was spent, or how much was added to the deficit. All this is saying is that Pres. Obama thinks that post-stimulus spending level, and trillion dollar deficits every year are almost enough, he only increased spending a little.

Because each of Obama's budgets has been larger than any Bush budget, but only a little larger than the last Bush budget. He also doesn't point out that the 2009 budget, the last under Bush, contained the $787 billion stimulus, and was a bipartisan panic reaction to the financial crisis.

The key in the article is the second paragraph:
"...the first year of the Obama presidency where the federal budget increased a whopping 17.9% —going from $2.98 trillion to $3.52 trillion."
The author assigns that increase to Bush, not Obama. (it was passed under Pres. Bush -- For the record, Bush requested 3.1 trillion, Congress passed 3.52. The blame for all budgets should rest on Congress, not the president).

So the current president hasn't had to increase spending much. It was done for him by Congress in 2008. He just maintained that level, and added a bit here and there. The raw numbers show this:

2006 - Bush - $2.66 T.
2007 - Bush - $2.73 T.
2008 - Bush - $2.9 T.
2009 - Bush - $3.52 T. (stimulus and financial crisis)
2010 - Obama - $3.72 T.
2011 - Obama - $3.63 T. (he asked for 3.8)
2012 - Obama - 3.79 T.

A bipartisan panicked 18% increase in 2009 has been expanded still further. So 2009 is the pivot point where the "new normal" level of spending was established. All the talk of "cuts" in spending are referring to the base level of the previous year (which is at least 600 billion higher than natural growth would have been).

What we really need is cuts back to the levels of spending before 2009, before the various stimuli were passed. Cuts need to be on the order of 1 trillion dollars every year, not the 4 or 5 trillion over 10 years people are touting as "big cuts"