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Monday, March 20, 2006

Is Bush a Big Spender?

In an update to his column today, Paul Krugman adds more on Bush and the perception that spending on domestic programs has grown out of control during his administration:

Is Bush A Big Spender?, by Paul Krugman, Money Talks: The idea that George W. Bush has been “spending like a drunken sailor” ... is in danger of becoming one of those factoids that everybody knows to be true, regardless of the evidence. ... But the data just don’t support that claim. Most of what you need to know is in the Congressional Budget Office’s historical budget data. From Table 6 we learn that overall federal spending rose from 18.5 percent of G.D.P. in fiscal 2001 ... to 20.1 percent of G.D.P. in fiscal 2005, a rise of 1.6 percentage points. However, that somewhat understates the true spending increase, because it includes interest payments, which fell because of lower interest rates. Non-interest spending rose from 16.5 to 18.6 percent of G.D.P. — 2.1 percentage points.

But where did the money go? Table 8 gives us data on discretionary spending — spending that isn’t mandated by law. Defense and international spending rose from 3.2 to 4.3 percent of G.D.P., 1.1 percentage points. So that’s more than half the spending rise, right there. Domestic discretionary spending rose from 3.2 to 3.5 percent of G.D.P. Conservatives make a big deal about this rise, but as you can see it’s fairly small... And what you ... can infer from other C.B.O. reports, is that a significant part of the rise in domestic discretionary spending ... was really new spending on homeland security.

So increases in non-security discretionary spending were a trivial factor in the overall rise in spending as a share of G.D.P., of which well over half – say 1.2 percentage points at least - was security-related. On to health care: Table 10 tells us that combined spending on Medicare and Medicaid rose from 3.7 to 4.2 percent of G.D.P. Health care expenses for current and retired government employees also rose.

As you can see, there isn’t much left. The Bush domestic spending binge never happened.

    Posted by on Monday, March 20, 2006 at 12:33 PM in Budget Deficit, Economics | Permalink  TrackBack (0)  Comments (7)


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