Paul Krugman keeps pretending that spending has gone down

posted at 10:01 pm on June 11, 2012 by Dustin Siggins

In his June 08 column, New York Times columnist Paul Krugman says a major part of the reason the recession under Reagan recovered more quickly than the current recession is because of government spending. From the column:

Why was government spending much stronger under Reagan than in the current slump? “Weaponized Keynesianism” — Reagan’s big military buildup — played some role. But the big difference was real per capita spending at the state and local level, which continued to rise under Reagan but has fallen significantly this time around.

There are a myriad of things with which to respond to Krugman over this – his most egregiously inaccurate claim – and other points and inferences in his column. Below are several:

First and foremost, local and state government spending hasn’t gone down since the recession started. The linked chart does show that government spending went down in from 2009 to 2011 as a percentage of Gross Domestic Product, but in pure numbers (also seen at the link) only 2009 saw a drop, and the spending in 2010 more than matched the 2009 drop.

(Data for this claim comes from the Bureau of Economic Analysis, and the linked chart and data come from Just Facts.)

Second, the spending prior to and during both recessions was both different and similar. From 1975 through 1979, state and local spending as a percentage of GDP fell by .9%, and then fluctuated for the following several years. Meanwhile, local and state spending went up by 1% of GDP from 1999 to 2002 and 2003. This reversed course for several years, and has since fluctuated. However, at no point did the spending as a percentage of GDP in the current recession drop even to the high point prior to the 1980s recession, an important context Krugman seems to ignore.

The above shows how the periods are different. They are similar insofar as the actual dollars spent consistently grew, meaning that Krugman’s overall contrast is still wrong.

Third, Dan Mitchell of Cato wrote a piece in February stating the obvious: The same bad policies Bush was responsible for that both contributed to the recession and exacerbated its problems have been continued by Obama. From Mitchell’s analysis:

  • Bush increased government spending. Obama has been increasing government spending.
  • Bush adopted Keynesian “stimulus” policies. Obama adopted Keynesian “stimulus” policies.
  • Bush bailed out politically connected companies. Obama has been bailing out politically connected companies.
  • Bush supported the Fed’s easy-money policy. Obama has been supporting the Fed’s easy-money policy.
  • Bush created a new healthcare entitlement. Obama created a new healthcare entitlement.
  • Bush imposed costly new regulations on the financial sector. Obama imposed costly new regulations on the financial sector.

To see some of these points in a more humorous way, check out this cartoon comparing the similarities in policies between Bush and Obama. All in all, for Krugman to blame (as he insinuated in this column and has outright stated in others) Republicans for allegedly holding Obama back and preventing Keynesian economic policies is insincere. Keynesian policies, as well as incestuous Big Business and Big Government back-scratching, have been the norm under the last two Presidents.

Fourth, as my good friend Bill Beach pointed out last week, our economy is incredibly sluggish compared to the 1980s recession, even though we are nearly five years out from its start and three years into the “recovery.” This is despite massive government spending in TARP, two stimuli, unemployment benefit extensions, the auto bailout, and trillions in Federal Reserve spending. Again, if it’s more outgoing federal money Krugman wants, he should simply look at the last several years.

Fifth and finally, Krugman’s argument about local and state governments and their alleged woes was coincidentally (or not?) discussed by President Obama on Friday, when the President said the nation’s economy is struggling mostly at the level of local and state governments. However, as the Wall Street Journal pointed out, Census data shows revenues for local and state governments have increased by six percent over the last two years.

In short, Paul Krugman is doing what Paul Krugman does best: cherry-picking a fact and making a completely unrelated conclusion that lacks proper context and fails to hold up even to the most cursory of examinations.

[Originally published at RightWingNews.com]

This post was promoted from GreenRoom to HotAir.com.
To see the comments on the original post, look here.


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Paul Krugman keeps pretending that spending has gone down

And Obama keeps pretending that Moochelle hasn’t gone down..
far enough…

Next!

Electrongod on June 11, 2012 at 10:10 PM

In short, Paul Krugman is doing what Paul Krugman does best: cherry-picking a fact and making a completely unrelated conclusion that lacks proper context and fails to hold up even to the most cursory of examinations.

I quess I just did a Paul Krugman in my last….or first…post

Electrongod on June 11, 2012 at 10:12 PM

That lying sack of shite needs a serious and unforgettable spanking.

Midas on June 11, 2012 at 10:13 PM

Carbon…!

Yeah…I know….:(

Electrongod on June 11, 2012 at 10:13 PM

To be fair, defense spending is totally different from wasting money on union payoffs and un-Constitutional social expenditures which burn up the minute they are doled out and return nothing of value. It’s funny and sad that whenever the idiot left wants to show how government spending has yielded so much it’s always defense expenditures they are talking about, but the first thing they want to cut is defense spending. Defense spending also has the added bonus of actually being Constitutional as national defense is one of the few legitimate jobs that the federal government is empowered to do.

ThePrimordialOrderedPair on June 11, 2012 at 10:14 PM

Krugman is having a good day when he remembers to wear pants before leaving the house, much less being able to professionally analyze economics.

Bishop on June 11, 2012 at 10:15 PM

He’s nuts.

CW on June 11, 2012 at 10:17 PM

“Is this mike on…?” - Paul Krugman

*crickets*

Seven Percent Solution on June 11, 2012 at 10:19 PM

But the big difference was real per capita spending at the state and local level, which continued to rise under Reagan but has fallen significantly this time around.

So, let’s compare Reagan’s first 5 years to Obama’s first four years (I’m being extra nice to Obama considering there was no Bush FY2009 budget and 1981 was Carter’s budget); Reagan’s first 4 full years to Obama’s tenure; and, Reagan’s entire presidency to Obama’s term:

(Spending is Federal, State, and Local)

Reagan 5 v. Obama 4

Average from 1981-1985
Spending-to-GDP: 35.23%
Deficit-to-GDP: 4.25%
Debt-to-GDP: 50.18%

Average from 2009-2012
Spending-to-GDP: 40.94%
Deficit-to-GDP: 9.04%
Debt-to-GDP: 111.75%

First term:

Average from 1982-1985

Spending-to-GDP: 35.63%
Deficit-to-GDP: 4.68%
Debt-to-GDP: 51.86%

Average from 2009-2012

Spending-to-GDP: 40.94%
Deficit-to-GDP: 9.04%
Debt-to-GDP: 111.75%

Reagan’s Entire Presidency v. Obama’s Tenure

Average from 1981-1989

Spending-to-GDP: 35.18%
Deficit-to-GDP: 3.91%
Debt-to-GDP: 56.73%

Average from 2009-2012

Spending-to-GDP: 40.94%
Deficit-to-GDP: 9.04%
Debt-to-GDP: 111.75%

Lies, again!

No, Krugman, Reagan Was Not The “Keynesian” And Obama Is Not The “Anti-Keynesian”

http://predicthistunpredictpast.blogspot.com/2012/06/no-krugman-reagan-was-not-keynesian-and.html

M2RB: Monty Python’s “How Sweet To Be An Idiot”

Resist We Much on June 11, 2012 at 10:23 PM

Paul Krugman keeps pretending that spending has gone down

He’s nothing if not consistent. He’s not consistent? Then I guess he’s nothing.

smellthecoffee on June 11, 2012 at 10:25 PM

…it’s ok…you didn’t have to say that Krugman was ‘cherry-picking’ a fact…when it is obviously ‘nose picking’ to get to the bile and boogers he banters and bloviate’s about.

KOOLAID2 on June 11, 2012 at 10:28 PM

Krugman seems off-message. The problem is Warren Buffett’s tax rate. It’s illogical to say that Buffett could just mail a check to the federal government. The rocket-boosting effect to the economy only occurs if he is forcibly taxed.

I don’t know why you people don’t get this.

J.E. Dyer on June 11, 2012 at 10:30 PM

Krugman is EJ Dionne’s mini-me.

Charlemagne on June 11, 2012 at 10:30 PM

It’s illogical to say that Buffett could just mail a check to the federal government. The rocket-boosting effect to the economy only occurs if he is forcibly taxed.

I don’t know why you people don’t get this.

J.E. Dyer on June 11, 2012 at 10:30 PM

LOL.

ThePrimordialOrderedPair on June 11, 2012 at 10:34 PM

I have tar… and I have pitchforks. What are we waiting for?

ExpressoBold on June 11, 2012 at 10:37 PM

I have tar… and I have pitchforks. What are we waiting for?

ExpressoBold on June 11, 2012 at 10:37 PM

The feather’s and torches, their on order…

SWalker on June 11, 2012 at 10:43 PM

cuckoo for coco puffs this one

cmsinaz on June 11, 2012 at 10:43 PM

and always remember each time Obama says “several of this nation’s leading economists agree with me”, this doofus is in that bunch..

hillsoftx on June 11, 2012 at 10:46 PM

cuckoo for coco puffs this one

cmsinaz on June 11, 2012 at 10:43 PM

There is nothing wrong with Paul Krugman that a date with a lamppost and 50 feet of Stout Hemp Rope wouldn’t fix in a damned hurry.

SWalker on June 11, 2012 at 10:46 PM

The IgNobel prizes are going to be run out of business for irrelevancy.

ThePrimordialOrderedPair on June 11, 2012 at 10:47 PM

“My administration is the only thing between you and the pitchforks,” – Cipher-in-Chief, Aprol, 2009

.
Remember that?
.

The feather’s and torches, their on order…

SWalker on June 11, 2012 at 10:43 PM

.
How long before they get here?

ExpressoBold on June 11, 2012 at 10:49 PM

How long before they get here?

ExpressoBold on June 11, 2012 at 10:49 PM

The delivery date is scheduled for Nov. 6th… ;p

SWalker on June 11, 2012 at 10:51 PM

… 50 feet of Stout Hemp Rope wouldn’t fix in a damned hurry.

SWalker on June 11, 2012 at 10:46 PM

.
One can still buy hemp in the USofA? Really, I didn’t know…

ExpressoBold on June 11, 2012 at 10:51 PM

The delivery date is scheduled for Nov. 6th… ;p

SWalker on June 11, 2012 at 10:51 PM

.
I’ll stand by till then.

ExpressoBold on June 11, 2012 at 10:52 PM

Mr Dustin,
I feel for you. You wasted so much time in busting the busted. Does anyone care what this laughingstock says anymore? As our President said – “He is a jackass”.

antisocial on June 11, 2012 at 11:01 PM

Antisocial,

Krugman is adored on the left. The more we on the right point out his inaccurate and misleading statements, the stronger our position is.

Dustin Siggins on June 11, 2012 at 11:03 PM

Does anyone with an IQ higher than room temperature still listen to anything this sh!tbird has to say? And yes, that is a rhetorical question.

Moose Drool on June 11, 2012 at 11:17 PM

One can still buy hemp in the USofA? Really, I didn’t know…

ExpressoBold on June 11, 2012 at 10:51 PM


Sure…

SWalker on June 11, 2012 at 11:27 PM

Krugman has his head so far up his anal orifice, it’s surprising that he can still breathe.

GarandFan on June 12, 2012 at 12:22 AM

As an economist, will someone please lock up this lunatic?

pat on June 12, 2012 at 2:11 AM

Liberals always have a predetermined conclusion for their studies and cherry pick the facts to back up that conclusion.

The government does not have enough money.
You and I don’t have enough money and the unemployed certainly do not. Businesses do not have enough money to put American back to work.

All wealth is created in manufacturing, mining and agriculture. How so? If you take everything away produced by manufacturing, mining and agriculture there is nothing left.

The government does not create wealth, it consumes it. Therefore government cannot lead the economy out of recession. Keynesian economics is a recipe for poverty not prosperity.

The Rock on June 12, 2012 at 2:19 AM

Hasn’t the fountain of un-made money, i.e. Keynesian
been trampled to dust enough yet? No, Paul is still
living the life of luxury.
Come on Mr. Krugman, just go ahead and pay above
and beyond your pay grade. Simple, huh?
You talk a poor game too, sir.
Pablum, writ large.

mickytx on June 12, 2012 at 3:56 AM

Krugman… another reason why I don’t watch ABC for my news…

Khun Joe on June 12, 2012 at 7:33 AM

Barry Hussein Soetoro and Paul Krugman are living proof that the Nobel Prize is meaningless and given to idiots.

wildcat72 on June 12, 2012 at 7:57 AM

Here is an interesting quote from the news:

“When,” Ms. Beehler asked, “did we come to believe that government should get rich and we should get poor?”

right2bright on June 12, 2012 at 8:22 AM

Krugman is a good fitting model for the statement “Statistics do not lie, Statisticians do lie”.

dahni on June 12, 2012 at 12:02 PM

Krugman reminds me of the story about the engineer, the attorney, and the economist who were shipwrecked on a small island with little water and no food except for unopened cans of tuna.

After many hours of trying, then failing to open the cans, the attorney said in fatigue, “With all of my knowledge, I am helpless to open these cans.” The engineering then said dejectedly, “With my training, I still need tools to open these cans.”

The economist then picked up a can, studied it, and started to pretend that he was pulling tuna from the can and putting in his mouth. He then looked at the others and said, “Well I’ve imagined that the can is open and I intend to eat my fill.”

EdmundBurke247 on June 12, 2012 at 12:31 PM

I just realized who Krugman reminds me of. He looks like a bearded version of that actor who plays the swishy police lieutenant in Reno 911.

CatchAll on June 12, 2012 at 1:16 PM