Recently, I did something I shouldn’t have done, and I’d like to confess here.
Someone I don’t know wrote me a nice note about some things I have written and some banking issues I’m working on (more on this someday). In the process of the note, he described himself as moderate Republican, “fiscally conservative and socially liberal.” This, it turns out, is one of my buttons because it implies that usually liberals aren’t fiscally conservative.
The idea that liberals are spendthrift is little more than an insult that has stuck over time due to incessant repetition rather than evidence. It wasn’t liberals who brought our nation to the brink of financial ruin in 2008. It wasn’t liberals who doubled Rhode Island’s debt 2003-2009 for no good reason. It wasn’t liberals who created the fiscal crisis that has bankrupted one Rhode Island city and threatens several more. In all of these cases, it was either soi-disant fiscal conservatives or crony insiders who did all of it and I, for one, am completely sick of having to feel apologetic about my policy preferences. Medicaid is a money-saving program, as is welfare, early childhood education programs, environmental protection, and a lot more like those. The fact is that every progressive I’ve ever had a policy conversation with should be described as fiscally conservative, and yet the stereotypes persist, due to lazy reporters and politicians who benefit by perpetuating it.
So I was pleased to notice this article yesterday that pointed out the grim reality. You know that Obama spending binge you read about, when he came charging into office with a mandate and a Democratic Congress? Never happened. The article points out that on an annualized basis, spending under Obama is up about 0.4% per year. Of course it’s true that the 2009 fiscal year included Obama’s stimulus package, even though he took office part way through that year, with the budget already passed. But even if you count the stimulus, spending is up 1.4% per year under this president. Compare that to 7.3% per year in Bush’s first term, and 8.1% per year in his second.
The article has a great bar chart comparing the fiscal records of the last few Presidents. Because I think he’s unjustly maligned, I checked out Carter’s numbers, too, and after adjusting for inflation, spending increased less under his administration than under Reagan’s.
Why is the federal deficit such a huge problem? Because of tax and spending decisions made under George W. Bush. Why are cities and towns in Rhode Island either bankrupt or flirting with it? Because of spending decisions made under Don Carcieri. Obviously Congress and the General Assembly have had a lot to do with this, too, but it wasn’t liberals in Congress who voted for the Bush tax cuts, the Medicare drug benefit, or even the Iraq War resolution. And it wasn’t liberals who doubled the state’s debt (mostly without voter approval), loaned $75 million to Curt Schilling, and came up with all the different tax cuts for rich people passed over the past 15 years. Some liberal members of the General Assembly cast votes for budgets containing those tax cuts, but that’s the way this Assembly is run, and many have supported floor amendments to the budget to overcome those cuts. (Of course the current Speaker of the House has been known to describe himself as liberal, but the public record hardly supports that, and I notice he’s stopped doing that, at least to the reporters whose work I read.)
Is there spending I support that isn’t getting done? Of course there is. I support actually doing maintenance on our assets — because it’s cheaper than not doing it. I support health care reform — because it’s cheaper. I support early childhood education — because it’s cheaper. I support a cleaner environment — because it’s cheaper. I support taxing enough so our governments don’t require short-term borrowing — because it’s cheaper. Get the picture?
Obviously this isn’t the only reason to spend money. Helping support the poor and disabled is not necessarily cheaper than letting them die on the streets, but bodies lying about would damage the feng shui of our cities. Government has a role in counter-cyclical spending, to keep the economy moving during a downturn. You actually can make cost-benefit arguments about both of these, but they rest on shakier numbers, so why not just go with the alleviating human suffering angle? Parks and beaches are cool, historically the arts have never thrived without government patronage, and I wouldn’t try to justify the Smithsonian on cost/benefit grounds, either. But overall the picture of spendthrift liberals is little more than a libel, perpetuated because fulfills some rough conceptual framework, and because some people imagine that being fiscally conservative means you don’t have to pay for stuff.
Which is all to say that I apologize to my correspondent for snapping at him for what was otherwise a perfectly pleasant note.
Tom,
Love it. I was going to do something on this, but you got to it first. Good!
There is so much flagrant lying coming from Mitt, Boehner, Ryan, the GOP overall and the MSM that it’s critical to get stuff like this out there.
I keep going back to the idea: we tried it their way. It didn’t work. We need is Keynesian intervention. This current situation has proven that Uncle Miltie Friedman was wrong: the Fed could not have ‘prevented’ the Depression by putting more money in circulation. That’s what Bernanke has been doing, and it hasn’t been enough.
“We need is Keynesian intervention.”
haha… And what do you call what we did during the Great Depression? FDR’s Treasury Secretary seemed to think it was Keynesian-style spending and he said *that* didn’t work either.
There is a canyon-sized rift between many of the politicians who have called themselves fiscally conservative when it was convenient to do so and actual fiscally conservative citizens. Hence the emergence of the Tea Party to throw out all the big-government frauds in the Republican Party like Bush II. Hard to find many self-described fiscally conservative citizens who approve of Bush’s deficit spending.
And that, of course, is what they say after the party every single time.
“Hence the emergence of the Tea Party to…”
Introduce anti-abortion legislation.
Yes, that’s why the Tea Party was so active during the Bush years, *ahem*.
Better late than never.
You know how you can tell a piece is nothing but partisan nonsense? When we have a guy like Tom, who we know is smart enough to realize that Presidents and Governors do not write and pass budgets they can only veto them, write a post completely ignoring that point so he can try to make D’s look less terrible compared to R’s. FYI — they both have no spending discipline. Neither party, on the balance, has ever seen a spending bill it didn’t like.
“Helping support the poor and disabled is not necessarily cheaper than letting them die on the streets”
Assuming that would even happen in absence of gov’t doing it.
“Assuming that would even happen in absence of gov’t doing it.”
It might be an assumption, but it is based on history. Prior the the establishment to the government safety net around WW2, if you had no money, you were kicked out of you home and you starved.
Now you are thinking, “Well I wouldn’t let my neighbor starve!” Well I wouldn’t either, but if my neighbor lost their job they wouldn’t be my neighbor for long. They would be forced to move to a cheaper place to live. They would be forced to live around other poor people who have no ability to help them.
If you don’t think the above is likely, read some biographies of people who grew up in the early 20′th century, before the government set up the various safety nets. I recommend, “Groucho and Me ” , Groucho Marx.
Thank you! What is “fiscally responsible” about passing a Medicare Part D that does not allow the government to negotiate prices with drug companies? What is “fiscally responsible” for massive over spending on defense? What is “fiscally responsible” about eviscerating the banking regulations that led, in part, to the crash and the bailouts of Wall St and Detroit? To mainstream conservatives, it is fiscally responsible to screw poor people and the middle class while doling out the largesse to crony capitalist friends and “too big to fail” entities like Goldman Sachs. It is conservatives (and plenty of the conservatives I’m talking about are Democrats) who support subsidies for oil companies and agri-business and drug companies while letting our schools decay and bridges collapse. what would have been more responsible: making a $102 million dollar bet that a guy who throws a ball can make a monster hit video game – or using that same money to improve our schools, ensure health care for our children and repair our roads?
“What is “fiscally responsible”[...] passing a Medicare Part D, [...] massive over spending on defense,”
None of that is fiscally conservative or fiscally responsible. As RTW notes, “There is a canyon-sized rift between many of the politicians who have called themselves fiscally conservative when it was convenient to do so and actual fiscally conservative citizens”.
“To mainstream conservatives, it is fiscally responsible to screw poor people and the middle class while doling out the largesse to crony capitalist friends and “too big to fail” entities like Goldman Sachs.”
Nice hyperbole, but remind me again, how many liberals voted for TARP, or is your argument solely that crony capitalism is bad only when faux conservatives vote for it?
The point is, the Ds are more fiscally responsible than the Rs.
Reagan/Bush 1: big deficit.
Clinton: surplus.
Bush II: deficit AND the worst economic disaster since the Depression.
Obama, working on it, despite coming into office in the midst of the worst economic disaster since the Depression.
So, yes, the Ds are better than the Rs.
And I love–LOVE–the, ‘oh, he’s not a real conservative’ nonsense after they leave office. Bush spent 5 of his 8 years with an R congress; he did exactly what he and the ‘conservatives’ wanted. What did they do? Blow up the budget.
As a result, I’m a little tired of the “Libertarians” and “Tea Partiers” who disavow what the ‘fake conservatives’ have done. And I’m also tired of all these calls for fiscal responsibility, without anyone making any definitive statements about what, exactly, they will cut. Ryan doesn’t, Romney doesn’t–oh, but I’m sure these guys aren’t real conservatives.
So what are we going to cut? Social Security? Medicare? The Military? What?
B/c if these three aren’t on the table for cuts, no way in heck are the Rs going to do anything except make the deficit EXPLODE!
So, time to put your money where your mouth is, Real Conservatives.
“I’m a little tired of the “Libertarians” and “Tea Partiers” who disavow what the ‘fake conservatives’ have done.”
What would you and others on this site suggest that we do? All we can do is complain and try to raise awareness of the spending problems. Real fiscal conservatives have no political power, as evidenced by the perpetually growing deficit regardless of which team is in charge. I’d have no problem cutting military spending.
On the contrary, real fiscal conservatives have political power right now, for better or worse. That was the whole point of the original post. That is, they have the Presidency and the Senate.
Just let me know when Federal spending actually decreases in real terms, Tom. Until then we’re just debating about how much to grow government each year. That’s the great thing about being a big government proponent these days – even when you lose, you still win.
P.S. Your graph doesn’t have any units on it (kind of important), and it doesn’t explain what so-called “growth” in spending actually means, but the CBO has released a nice graph of annual Federal expenses as a percentage of GDP. Nice drastic spike for the Obama years compared to previous presidents. Tax revenue is also down, but I think progressives would agree that makes him more fiscally irresponsible, not less.
en.wikipedia.org/wiki/File:Revenue_and_Expense_to_GDP_Chart_1993_-_2008.png
“Reagan/Bush 1: big deficit. Clinton: surplus. Bush II: deficit AND the worst economic disaster since the Depression. Obama, working on it, despite coming into office in the midst of the worst economic disaster since the Depression. So, yes, the Ds are better than the Rs.”
As I noted to Tom, the President doesn’t control the purse strings, Congress does. And what surplus under Clinton? The national debt increased every year while he was president.
Oh, and I forgot to add, you asked what would be cut. I’d start with the following departments in whole: Dept of Commerce, Dept of Education, Dept of Housing and Urban Development, Dept of Energy. I’d also look to cut DOD spending by something approaching 50%, which would require a complete overhaul of what the function of the US military is.
HUD is a completely useless department that exists solely to perpetuate its own existence and maintain Federal headcount. I doubt you could find a single reputable economist who thinks it is doing a good job of accomplishing… whatever its mission is supposed to be. In reality, it just incentivizes people to be dependent upon government for the rest of their lives and stay in self destructive living habits. I received a very generous job offer at this agency a couple of years ago. I did not accept because the department so thoroughly disgusts me.
Department of Education is similarly useless. Education should be a local matter. Even if there is a core Federal curriculum, to say that justifies an entire department with thousands of people making over $100k is craziness. It could easily be done through a consensus process and stay semi-private.
Those are just two examples that hint at the scope of the problem. I guarantee you’ve never heard of 90% of the Federal agencies out there. Most of them could probably reduce their headcount by half and nobody would realize it in terms of services provided. It’s not a small secret that nobody is ever fired in the Federal government. Even if somebody is brought on to work on a 3-year specific project, they’re there forever regardless of whether there is productive work to do or not.
The real problem is with all the “support staff” that comes with any Federal agency. You can’t just have a lean, mean group of people attacking whatever the agency’s supposed mission is. You also have to have: an entire HR department, an equal employment opportunity office, a legal office, a legislative affairs office, a communications office, administrative staff, IT, etc., so before you know it you’re up to dozens or hundreds of people. And all of the incentives are for directors to hire as much as possible and grow their dynasties – the money is just an abstraction to them. Many of the support staff will be earning over $115k at GS-13 or above, which is considered a run-of-the-mill, mid-level salary in the Federal government. Benefits are generous. Did you know Federal transit subsidies for the Metro were doubled to $240/month with stimulus money?
Tom, I call myself ‘fiscally conservative’ even though I support universal health care and beefing-up education. I think too many Republicans are chasing their philosophy right into the toilet these days.
At the same time, I don’t think raw spending should be a tool used to boost the economy, nor do I think taxation should be used to try to control levels of income equality. I think it makes sense to tax richer people at higher rates because *they have the money*, not because I want them to be ‘more equal’, like many of my liberal friends.
It infuriates me when I find out that local and state leaders have made deals that ‘save all the jobs’ in certain departments, only to find out that the people in those departments no longer have the tools they need to get their work done. I think Democrats need to bring some SERIOUS efficiency improvements to the table, even if it means upsetting labor, if they want to maintain a solid reputation and make progress on health care and education.
“I call myself ‘fiscally conservative’ even though I support universal health care ”
Why ‘even though’? Universal health care is universally more cost-effective than the system we have now.
Universal health care is by far the most fiscally sensible option, never mind the most just one.
While I won’t disagree with the premise that gov’t spending is too high, the key data used by Tom to bolster his point–the Nutter piece (and chart) that claims Obama isn’t a big spender–has been completely taken apart by the likes of:
Heritage – blog.heritage.org/2012/05/24/setting-obamas-great-fiscal-restraint-record-straight/
Investors Business Daily – news.investors.com/article/612620/201205241756/obama-is-a-spendthrift.htm?p=full but also
Washington Post – www.washingtonpost.com/blogs/fact-checker/post/the-facts-about-the-growth-of-spending-under-obama/2012/05/24/gJQAIJh6nU_blog.html
Associated Press – www.washingtonpost.com/business/economy/fact-check-obama-claim-of-thrifty-spending-falls-short-of-reality-bailout-skewers-numbers/2012/05/26/gJQA8fgzrU_story.html