Alan made a comment asking if I could drag out Krugman’s blog, so I’m going to give it a go. I don’t know if his charts will come through, so let’s consider this a trial run in case there are kinks to be ironed out. There were 2 posts yesterday. The earlier one was “Martin Wolf, Hippie” and is replete with charts. Let’s see if they come through… Here we go:
Martin Wolf has a piece in today’s FT making the case that (shock!) the deficit is not America’s biggest problem, or indeed a problem at all right now. His case is pretty much the same one I’ve been making; also, unlike Larry Summers yesterday, his piece doesn’t blur its point by starting with an extended exercise in dutiful deficit-bashing.
Wolf also puts this in the context of what has been happening to the private sector. As he says, the collapse of the housing bubble and a sharp rise in saving (due both to wealth destruction and to deleveraging) has led to a sharp movement from financial deficit to financial surplus in the private sector. Those who claim to be deeply upset about public sector deficits should be asked, what would have happened, given this attempt by the private sector to move into surplus, if the public sector had tried to stay in balance. Can you say Second Great Depression?
Meanwhile, via Mark Thoma I see that Robert Waldmann and Karl Smith have also gotten into the “what spending surge?” debate. Actually, here’s what may be the simplest way to see things. Here is total government spending (federal, state, and local) since 2000 on a log scale, so that a constant slope means a constant rate of growth. See the spending surge under Obama? Well, actually the reverse.
Yes, you can argue that spending was growing too fast under Bush, although it’s funny how few deficit scolds saw fit to mention that at the time. Or you can say that you just want less spending, although as always people who say this tend to be short on specifics. But the narrative that says that spending has surged under Obama is just wrong – what we’ve actually seen is a slowdown at exactly the time when, for macroeconomic reasons, we should have been spending more.
Update: Someone is going to claim that I cheated by looking at overall government spending, as opposed to Federal. Actually, no, not if you’re trying to confront claims about “big government” in general. But anyway, here’s the same chart for federal only:
You can see a bit of an acceleration early on in the crisis, reflecting unemployment benefits and food stamps. But since then, a flattening. Still nothing you would call a surge.
Yowza!!! The charts seem to be fine! Later in the day he took a look at “Brave, Honest Paul Ryan.” (The Krug does seem to unleash some fine quality snark on his blog, doesn’t he?) Here we go:
No one is suggesting that what we call our earned entitlements — entitlements you pay for, like payroll taxes for Medicare and Social Security — are putting you in a ‘taker’ category. No one would suggest that whatsoever.
the category “no one” includes one Paul Ryan, who declared back in 2010 that
Right now about 60 percent of the American people get more benefits in dollar value from the federal government than they pay back in taxes. So we’re going to a majority of takers versus makers.
Hey, wasn’t there something like this in Homer?
But while everyone has noted Ryan’s raw dishonesty here, let’s not let the cowardice pass unmentioned. If you’re a Randian conservative, as Ryan claims to be, then you should consider Social Security and Medicare every bit as much a part of the moocher conspiracy as Medicaid and food stamps. And don’t say that you pay for what you get: Social Security benefits aren’t proportional to payment, so that the system is somewhat redistributionist, and Medicare benefits don’t depend at all on how much you pay in, so that the system is strongly redistributionist. (You might even say that Medicare takes from each according to his ability, and gives to each according to his needs).
All of this is fine with me, but it should be anathema to Ryan. But he knows that Social Security and Medicare are popular, so he pretends that his radical philosophy has nothing bad to say about these programs, and that we can massively downsize government on the backs of the undeserving poor.
But remember, he’s a Brave, Honest Conservative. Everyone says so.
The only problem that I’m having is trying to figure out how to “double indent” the quotes in his blog… Until I can figure that out (and I’m a bit of a Luddite…) I’ll use italics for his block quotes. Thanks for the idea, Alan!