Wednesday, May 23, 2012

Yes, there was an Obama spending binge

Much has been made of the claim by Rex Nutting of MarketWatch that the Obama spending binge never happened.  As usual, James Pethokoukis is on top of this.  Basically, Nutting's claim is that the big jump in spending occurred in the 2009 budget, which was largely due to the Bush administration, so our current level of spending is Bush's fault.  What Nutting doesn't tell you is that that increase in the 2009 budget was due to a temporary emergency measure, the Targeted Asset Relief Program (TARP).  Obama made that spending level permanent, using the TARP bump as cover. 

The biggest surge in U.S. government spending occurred to finance World War II.  When the war ended, spending returned to something close to its pre-war level.  According to Nutting's logic, if Harry Truman had instead decided to maintain Roosevelt's spending level by creating new social programs, it would have been Roosevelt's fault.