President Obama and the Imaginary Spending Binge

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.