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http://www.marketwatch.com/story/obama-spending-binge-never-happened-2012-05-22?pagenumber=2

Obama spending binge never happened
By Rex Nutting, MarketWatch

WASHINGTON (MarketWatch) — Of all the falsehoods told about President Barack Obama, the biggest whopper is the one about his reckless spending spree. As would-be president Mitt Romney tells it: “I will lead us out of this debt and spending inferno.” Almost everyone believes that Obama has presided over a massive increase in federal spending, an “inferno” of spending that threatens our jobs, our businesses and our children’s future. Even Democrats seem to think it’s true.
 
Government spending under Obama, including his signature stimulus bill, is rising at a 1.4% annualized pace — slower than at any time in nearly 60 years. But it didn’t happen. Although there was a big stimulus bill under Obama, federal spending is rising at the slowest pace since Dwight Eisenhower brought the Korean War to an end in the 1950s. Even hapless Herbert Hoover managed to increase spending more than Obama has.

Here are the facts, according to the official government statistics:

• In the 2009 fiscal year — the last of George W. Bush’s presidency — federal spending rose by 17.9% from $2.98 trillion to $3.52 trillion. Check the official numbers at the Office of Management and Budget.

• In fiscal 2010 — the first budget under Obama — spending fell 1.8% to $3.46 trillion.

• In fiscal 2011, spending rose 4.3% to $3.60 trillion.

• In fiscal 2012, spending is set to rise 0.7% to $3.63 trillion, according to the Congressional Budget Office’s estimate of the budget that was agreed to last August.

• Finally in fiscal 2013 — the final budget of Obama’s term — spending is scheduled to fall 1.3% to $3.58 trillion. Read the CBO’s latest budget outlook.
 
The big surge in federal spending happened in fiscal 2009, before Obama took office. Since then, spending growth has been relatively flat. Over Obama’s four budget years, federal spending is on track to rise from $3.52 trillion to $3.58 trillion, an annualized increase of just 0.4%. There has been no huge increase in spending under the current president, despite what you hear. Why do people think Obama has spent like a drunken sailor? It’s in part because of a fundamental misunderstanding of the federal budget.

What people forget (or never knew) is that the first year of every presidential term starts with a budget approved by the previous administration and Congress. The president only begins to shape the budget in his second year. It takes time to develop a budget and steer it through Congress — especially in these days of congressional gridlock.

The 2009 fiscal year, which Republicans count as part of Obama’s legacy, began four months before Obama moved into the White House. The major spending decisions in the 2009 fiscal year were made by George W. Bush and the previous Congress.

Like a relief pitcher who comes into the game with the bases loaded, Obama came in with a budget in place that called for spending to increase by hundreds of billions of dollars in response to the worst economic and financial calamity in generations.

By no means did Obama try to reverse that spending. Indeed, his budget proposals called for even more spending in subsequent years. But the Congress (mostly Republicans but many Democrats, too) stopped him. If Obama had been a king who could impose his will, perhaps what the Republicans are saying about an Obama spending binge would be accurate.

Yet the actual record doesn’t show a reckless increase in spending. Far from it.

Before Obama had even lifted a finger, the CBO was already projecting that the federal deficit would rise to $1.2 trillion in fiscal 2009. The government actually spent less money in 2009 than it was projected to, but the deficit expanded to $1.4 trillion because revenue from taxes fell much further than expected, due to the weak economy and the emergency tax cuts that were part of the stimulus bill.

The projected deficit for the 2010-13 period has grown from an expected $1.7 trillion in January 2009 to $4.4 trillion today. Lower-than-forecast revenue accounts for 73% of the $2.7 trillion increase in the expected deficit. That’s assuming that the Bush and Obama tax cuts are repealed completely.

When Obama took the oath of office, the $789 billion bank bailout had already been approved. Federal spending on unemployment benefits, food stamps and Medicare was already surging to meet the dire unemployment crisis that was well underway. See the CBO’s January 2009 budget outlook.

Obama is not responsible for that increase, though he is responsible (along with the Congress) for about $140 billion in extra spending in the 2009 fiscal year from the stimulus bill, from the expansion of the children’s health-care program and from other appropriations bills passed in the spring of 2009.

If we attribute that $140 billion in stimulus to Obama and not to Bush, we find that spending under Obama grew by about $200 billion over four years, amounting to a 1.4% annualized increase.

After adjusting for inflation, spending under Obama is falling at a 1.4% annual pace — the first decline in real spending since the early 1970s, when Richard Nixon was retreating from the quagmire in Vietnam.

In per capita terms, real spending will drop by nearly 5% from $11,450 per person in 2009 to $10,900 in 2013 (measured in 2009 dollars).

By the way, real government spending rose 12.3% a year in Hoover’s four years. Now there was a guy who knew how to attack a depression by spending government money!

But spending is still 17 to 20% higher than the level in 2008. 

He’s had no obligation to maintain that extra $500 to $600 billion a year yet he has and the blowback is to always blame Bush for it rising to that level.  Sorry but that’s excusing bad behavior by pointing to equally bad behavior as some sort of justification.

I think he is attributing the Bush tax cuts entirely to Bush, even the extension in 2010. Plus, in some of the graphs I've seen (the white house version in particular) none of the Affordable Care Act is included, because technically I guess they haven't spent it yet. Whatever.

 

Funny numbers. . . They are not set to start that binge until 2013 as spelled out in Obamacare.  Quite obvious that the entire bill was engineered to present favorable numbers before a second term election.  

Now with the constitutionality of the bill in question and an expatiation of a Supreme Court overturn, we hopefully can avoid a second recession. I have no doubt though, if president Obama is re-elected and Obamacare fails, a strong attempt will be made to divert those funds elsewhere.  The health of the economy is really not a concern for this guy.

I am convinced that a second term will offer him license, as he alluded to the Russians, to act more freely in his efforts to be "transformative."  This of course is welcome by the progs, unions, and other command economy fans, but would would be problematic for us "evil" free marketers.

  

Are means-tested entitlements subject to appropriation? Spending is high because the economy is in the toilet and the social programs have expanded as a result. Tax revenue is low because of the extension of the Bush tax cuts (you certainly can't solely blame Obama for this) and the continued high unemployment. You may have noticed that it's the Republicans who seem to be most against the across the board cuts that will take effect early next year. They're already talking about taking a trillion dollars or more of spending out of sequestration.

Gaspar, it's amazing how you continue to be "completely convinced" of things that contradict Obama's actual record. You act like the guys who are just certain that Obama has been horrible for gun rights or that he's some sort of closet socialist even though he picks the market-based solution every time. (Save one, student loans)

Remember his posts in the past about finance and politics...the predictions?

Hope springs eternal, T.

As the day has gone on, people are coming out of the woodwork claiming this Nutting guy doesn't have a clue what he is talking about. Be careful of the propaganda. Plus, I think people have had just about as much as they can take of the Bush comparisons. For the most part it's like saying well I'm not as much of a drunk as that guy while at an AA meeting.

Just take a look at all the mathematical gymnastics required to reach the conclusions he’s coming to.  I need a nap after reading that.

I realize we're in Oklahoma, but since when is addition, subtraction, and division "mathematical gymnastics"?

All I can say is...There are lies, there are damned lies, then there are statistics.

I think it would be wise for the administration to steer clear of this one, since it could easily be shown with a few waves of the magic wand that he is equally as guilty of spending like a drunken sailor. If they were to go with it, how would they explain the exploding deficit. To ridicule something (Bush spending) and just let it happen anyways? I don't think that's gonna fly.

The author of this claim, admitted on the radio that he didn't have any idea what baseline budgeting was. Or the fact that all the stimulus and tarp (which was supposed to be a one time shot) ended up in the baseline of every budget going forward. You would have to ignore so many things to come up with the conclusion that he did.

Now, am I saying Obama is solely responsible for all of the spending? No. Am I saying Bush was not responsible for all that spending? Heck No. I am saying they are all spending way WAY too much money. And it is just as ridiculous for Romney to say he is one with middle America as it is for Obama to say he is a frugal spender. It is a quaint memory when hundred or two hundred billion dollar deficits used to enrage people.

What??  Did you even read that??  That 17.9% was Bush's last budget!

Backsliding on our recovery?

He woosed out horribly when he caved on letting the tax cuts extend.  If he had stood up and done the right thing, we would be in MUCH better shape now.  As proven by every recession/depression we have had for 90 years.



He has not been horrible yet on gun rights - except for his votes and actions against the people of Illinois, but that's Illinois - it's like Louisiana - who cares?  It is my strong hope that he continues to not want to walk into that buzz saw and test his "mandate" if re-elected.

Since we are in Oklahoma!  You know that....

The deficit has not (appreciably) increased since FY09. In fact, it is now lower. Perhaps you are confusing the deficit with the debt? Personally, I don't worry much about the debt. Interest rates are low and we owe the vast majority of it to ourselves, despite all the talk about Chinese (and the Japanese before them) "owning" us.

Would I rather that we not be spending so much on foreign wars and social programs to keep people's heads above water in this stagnant economy? Why yes, yes I would. Those resources could be better used for other purposes by the government or left to the people. However, it is a great time to borrow for things that will improve our future situation. We have thousands of bridges across this country in need of repair. Tens of thousands of miles of roads. Thousands of schools. There are plenty of productive projects we could spend money on while interest is low and construction unemployment is high.

As it stands, inflation is already lower than is desirable for a robust recovery in an overleveraged environment..

You mean the "exploding deficit" that is down to almost 1/2 what it was under Bush's last budget?  

He talked about that $1.9 trillion and said he would get it down to $1 trillion in his first term.  Well, he did miss it a little bit - maybe - we are on pace to be at about $1.1 trillion for this fiscal year.  That would be very close to half....just think how much better it would have been if he hadn't turned Republican...

Check the Federal Debt History site.  Enlightenment in the form of truth will hurt your head, though, so maybe better not....

Let's do. Because we could play the numbers game all day long.


Baseline for this exercise is FY01

           Debt         Def    Def (1983 $)
FY01    5,807B      133B       75B

FY02    6,228B      421B      234B
FY03    6,783B      555B      302B
FY04    7,379B      596B      315B
FY05    7,933B      554B      283B
FY06    8,507B      574B      285B
FY07    9,008B      501B      241B
FY08   10,025B   1,017B      472B
FY09   11,909B   1,885B      879B

FY10   13,562B   1,652B      758B
FY11   14,790B   1,229B      549B

Considering the horrendous downturn in the economy we had in 2008, I don't think it is a big surprise that spending shot up (that and spend happy Dem's took over in 07). You also see the uptick after the FY01 more than likely due to mini crashes (tech & 9/11). It seems that the emergency spending always becomes permanent. Yes, it would appear that Obama has presided over a historic reduction in deficit spending (which one might attribute to the standstill in Congress due to the wave election of 2010, but who's counting), however he is still averaging more than double what Bush did over his entire Presidency and if one were to be completely honest and attribute some of FY09 to Obama's admin (as he did sign it and increase what Bush requested) the outlook would be even worse.

The admin has also made it impossible to predict the spending in the future due to the propensity to just go with continuing resolutions or omnibus spending bills. So basically, this article by nutting is using the baseline budget for Obama's spending. Of course it is going to be low.

The baseline is 1791.  Looks like you have the data source - Federal Debt History.

The missing part is how the spending has been dead flat for the last few years, while skyrocketing from about 1980 to 2008 - spending on, but not paying for those pesky little wars that the "you know who" are so fond of.  Table 1.1 here;
http://www.whitehouse.gov/omb/budget/Historicals

Continuing resolutions are NOT made by the President - but you know that - ALL spending originates in the House.

I do. Throw out the dems! Seems to be working so far. :)

Wow, really?  Gimme some of what you're smoking...

Really?  Your real standard of living has gone up over the last 30+ years?

(If you say yes, you are lying or a CEO.)

My standard of living has and I’m not a CEO.

Joke, seriously?

But, in all seriousness, the timing correlates pretty well. Dems come in, deficit spending sky rockets. R's in spending def spending decreases. Coincidence, I don't know. Personally, I think the split Congress has more to do with the decrease in deficit spending than anything. That and no one could sell keeping all the bailout level spending going forever. Just a hypothesis, mind you.

And yes, the standard of living has gone up over the last 30 years. The last 5, probably not. But the last 30, definitely.

Standard of living is not strictly a measure of income you know right?

And it even seems the Washington Post is backing off this one. Talk about Bizarro World.

http://www.washingtonpost.com/blogs/fact-checker/post/the-facts-about-the-growth-of-spending-under-obama/2012/05/24/gJQAIJh6nU_blog.html

Thought this info graphic was pretty good too.

(http://www.politicalmathblog.com/wp-content/uploads/2012/05/MarketWatchObamaSpendingInfographic2.jpg)

Right off the bat, the first line is bogus.

A history lesson:
The Economic Stimulus Act of 2008 (Pub.L. 110-185, 122 Stat. 613, enacted February 13, 2008) was an Act of Congress providing for several kinds of economic stimuli intended to boost the United States economy in 2008 and to avert a recession, or ameliorate economic conditions. The stimulus package was passed by the U.S. House of Representatives on January 29, 2008, and in a slightly different version by the U.S. Senate on February 7, 2008. The Senate version was then approved in the House the same day.  It was signed into law on February 13, 2008 by President Bush with the support of both Democratic and Republican lawmakers.

Ah yes, Gaspar of Washington county....

This is a counterfactual statement sometimes advanced by Republicans. The uptick in the deficit then was due to the Bush tax cuts, two wars, a vastly enlarged security state, Medicare Part D, the second round of Bush tax cuts, and at least a hundred billion a year in illegal tax shelters that continue to this day because we don't appropriate enough money for IRS enforcement.

You may want to read David Cay Johnston's 2004 book entitled "Free Lunch" to get more information about the last bit there. It's rather informative, and makes it quite clear that both Republicans and Democrats have been dissembling on taxes since 1980. The sad thing is that most of the scams he talks about in his book are still going on today.

Edited to add: The actual deficit numbers might help. Note that FY12 is not yet complete, so it's an OMB estimate. The remainder are the actual numbers from Treasury.

(http://research.stlouisfed.org/fredgraph.png?g=7ud)

Not to be picky, but fiscal year 2001 ended in June of 2001. Bush had only been in office for all of 5 1/2 months. None of that stuff you mentioned had occurred yet. And if you look at the deficit spending it stayed relatively constant until FY 2008. And everyone knows why it spiked up then.

None of that is true. The first Bush tax cuts were passed in June 2001. Refund checks were going out by July. Moreover, the federal fiscal year begins October 1st, not July 1st. And let's do look at the deficit spending record since FY00.

(http://research.stlouisfed.org/fredgraph.png?g=7ug)

The deficit increased every year between 2001 and 2005, when the housing bubble spiked the economy.

Beat me to it erfalf on the graphic.The jobs graph is the one that stood out to me.

Analysis.

http://hotair.com/archives/2012/05/24/how-to-make-obamas-spending-look-small-marketwatch-rebuttal-infographic/

I guess that is like welcoming me to the club. I have a nickname. :)

The inevitable fisting of the Nutting story from erfalf's link:

Yeah well, you guys other than Guido, Gaspar, and Erfalf are Democrats and you all suck. 

There, thread winner!

Anyways, the way I came up with what I did. Apparently I was transposed something incorrectly. But anywho. Now keep in mind, statistics obviously can’t be considered FACT. Plus I believe the government does not have to report future obligations when reporting it debt. So there is plenty of wiggle room. It is all a matter of opinion. All I am saying in regards to the recent Obama claim, is that it is a stretch to start considering Obama a thrifty president.

heir:

To come up with what I did, I used actual deficit number from the Office of Management and Budget. These number include on and off budget items (not really sure what that means, but anyways):

FY2009 - $1,412,688M
FY2010 - $1,293,489M
FY2011 - $1,299,595M

I adjusted the 2009 number by roughly $400B since that is roughly the difference between the budget that Bush approved and Obama signed and implemented in 2009. That gives us about $1T for FY 2009 under Bush.

So, with this idiot math I come up with the deficit actually INCREASING nearly 30% under the Obama administration. And if you really want to blow your mind look at the deficit numbers pre-bailouts. We would have to cut another 50% or so to get anywhere near there (or I guess increase revenues 50% or so, but since neither seems particularly likely).

I could use the actual numbers to show a zillion different things, just like Nutting did. What is more realistic? That is what you have to consider when looking at statistics.

The WSJ tackled it also: http://online.wsj.com/article/SB10001424052702304707604577426240727922340.html?mod=rss_opinion_main

Let's not forget that sometime in the recent past - and I cannot remember exactly when, but think it was summer last year - the Social Security trust fund went from + to -.  So that will become an increasing item in the mix for the next couple of decades.

Total future obligations are mind blowing - many tens of trillions of dollars.  And we all know it ain't gonna happen.  The checks may be written and taxes collected, but it will become more and more just Monopoly money - meaning the currency will be inflated enough to make the numbers work out.  Because we as a span of generations right here and now cannot put on our "big boy panties" and do what MUST be done to actually fix these things.  It is 'unpopular' and the people with the checkbooks own the ones who write the laws. It will become a futuristic, near apocalyptic, science fiction scenario.



Maybe like this.....??

Down the Yangtze the awful prediction has been fulfilled.  You expect this river trip to be an experience of the past - and it is.  But it is also a glimpse of the future. In a hundred years or so, under a cold uncolonized moon, what we call the civilized world will all look like China, muddy and senile and old-fangled: no trees, no birds, and shortages of fuel and metal and meat; but plenty of pushcarts, cobblestones, ditch-diggers, and wooden inventions. Nine hundred million farmers splashing through puddles and the rest of the population growing weak and blind working the crashing looms in black factories.

Paul Theroux, "Sailing Through China", 1983.

Ah, for a second there I thought Shadows had hacked your account...

Here's the thing: Your total future obligations when you were born were somewhere on the order of a million bucks (in today's money). Was it some horrible shame that you didn't have the funds to support yourself for the rest of your life the moment you popped out of momma's womb? There's a reason why SS doesn't make much hay about their 75 year predictions. They are always completely wrong. Too much can change between now and then to say much of anything about the solvency of a fund 75 years hence. More people might be born, fewer people might be born. We might have a massive flu epidemic. Who the hell knows? It's useful to have the number, but you also have to look very carefully at the assumptions used to reach it and realize that it's only a guess.

In the case of something like a life insurance company or Social Security, 20-25 year projections are much more useful, for there is a lot less assuming and a lot more projecting. Confidence is obviously much higher. You may note that almost every year since 1987 when the new SS rates went into effect, someone has been beating the drum of insolvency based on the trustee's long term outlook. Nearly every year the insolvency date moves a year or more into the future.

Moreover, those future obligations can largely be shrunken by throwing out stupid policies that do things like drive skyrocketing health care costs. ;)

When I read this article, I thought of former co-workers. They didn't want to set the bar too high right off the bat. They figured to themselves they needed wiggle room so that they could show improvement, to get bonuses, raises, promotions, etc. Obama spends like a drunken sailor right out of the chute so that the rest of his term he appears fiscally conservative. Now I doubt that thought ever really crossed anyone in the administration's mind, but hey, it's fun to speculate.

Social Security is gonna be a self limiting issue to some extent.  All of us - my age group - baby boomers - are gonna work through the system and while there will be a few hanger's on, most of us will be dead in less than 30 years.  That 'peak' will go back down, and while there are peaks in the time since, none seem to be nearly as big as my group.

Probably the biggest thing I have in mind for the tens of trillions is the current debt - kind of like a credit card debt - we keep adding to it, only make the minimum payments, and never pay down any principle. (sp?)  Over a 50 year period, that means - when interest rates get to more normal levels - that with today's level, we probably have about a 50 trillion payoff, IF we started making minimum payment equivalent reductions.  So today's 15 is gonna be paid back many times.

If we just wait until the house of cards all falls down, then we may end up with a decade or two (think Argentina) of pain, but eventual recovery at lower activity levels.  Perhaps a 'steady state' economy??

Wish I could be here to see it.  Probably won't happen, 'cause I think that is 30 to 50 years away.