Wednesday, June 20, 2012

Vote for Me! I Helped Wreck the Economy Too!

Yeah, but...
There's been a bit of Presidential campaign back and forth over the level of government spending under Obama.  Primarily, this has been driven by a substantial amount of campaign advertising that uses a particular set of metrics to show that the growth of Federal spending under Obama has been quite a bit smaller than it has under any of the previous modern administrations.  In a sense, this was an important and necessary bit of pushback against the accelerating Romney meme that spending has exploded under Obama.  The Obama ads have the benefit of being mostly true, in many of the same ways that the Romney campaign's "conventional wisdom" is mostly false.

But here's the thing.  This is actually one of the worst aspects of Obama's economic record, and to the extent that the President has any control over spending (Hint: He has virtually none) represents a destructive and pointlessly cruel form of economic stewardship.  Government austerity in the midst of the worst economic downturn since the Great Depression is bad enough, but reducing spending at a time when interest rates are at historical lows comes awfully close to criminal negligence.  And with states generally legally bound to balance their budgets, the cuts to state and local workers like firefighters and teachers have been nothing short of draconian.

One of the most valuable uses of Federal stimulus funds was direct economic aid to states.  This allowed the states to keep paying employees, who could keep their houses and continue to buy goods and services, reducing unemployment and keeping the economy from free fall.  It is now obvious that the stimulus bill was far too small, and historians will argue forever whether it might have been larger - say, for example, if Obama had originally asked for a larger amount, and the reductions forced by Congress would have been proportional rather than absolute - but there can be no doubt that substantially more direct state-level federal aid would have been  a boon not just to the national economy, but to thousands of little local economies all over the country.

Ultimately, it is an appalling illustration of the perversity of the political and economic conversation in America today.  Obama knows all too well that this turn to brutal austerity was the worst possible response to the economic collapse, and did immeasurable harm to countless American families.  But this is what we have become - no one is allowed to say what is true because the "American People" have come to believe a set of falsehoods.  They 'know' that when times are lean, the government must "tighten its belt" just the way families must.  They 'know' that stimulus spending doesn't work.  And most of all they 'KNOW' that lowering the national debt is the most important economic imperative, and will lead more quickly than anything else to a recovery.  So, because no one believes for a moment that the people can be educated, that they can be helped to understand the way the world actually works, even the campaign of the incumbent President must tout as a great accomplishment the most damning economic statistic from his first term.


  1. a post a day?

    mikey's gone nutzoid!

    ...looking at that chart, it becomes obvious that the recession would have set in far earlier had GWB not been on a crazy spending spree.

    Which, as you point out, we should be doing right now.

  2. Hey, c'mon, I'm writing all these wacky weblog posts. Can't do everything every day!!