Wednesday, March 28, 2012

Big Spender - Obama or Reagan?

Republican pandering would have you believe that President Obama is growing a socialist government of Brobdingnagian proportions. Their solution is to return to the small government paradigm of their sainted President Reagan. Do the actual numbers on net change in government spending under the two presidents support the Republicans' version of history? Not a bit of it.

The chart shows that even though the economy inherited by Obama was in much worse shape than the one facing Reagan, the inflation adjusted net change in government spending was much greater under Reagan than Obama.

Change in Government Spending Obama vs Reagan

Were it not for the intransigence of far-right Republican and Tea Party extremists, government spending in the form of a larger stimulus package might well have the economy much further along the path to recovery than it currently is. Republican opposition to every presidential proposal for stimulating the economy and reducing unemployment has thwarted the opportunity for a more robust economic recovery.

Balancing budgets is a laudable goal in the long run, but austerity measures during economic downturns are contrary to best economic theory. Inappropriately timed austerity keeps unemployment higher longer than necessary, slows recovery, and results in much more economic pain to the non-rich than necessary.

History has shown Republican economic theories since the era of Reagan to be bogus magical thinking at best and dangerously counterproductive at worst. Compounding these errors of economic theory with mendacious revisions of the historical record cannot be helpful to resolving our current economic woes.

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