CQ Roll Call June 19, 2013 | Register

Chart of the Day

Posted at 12:45 p.m. on Feb. 1

obama reagan spending Chart of the Day

– Ezra Klein builds this chart comparing quarterly GDP growth from President Obama’s actual spending policies (in blue) and what growth would have looked like had Obama spent at President Reagan’s levels (in red).

“Whereas total government spending dropped in 10 out of the 16 quarters that comprised Obama’s first term, it rose in 13 out of Reagan’s first 16 quarters… I took Obama’s GDP growth, netted out the effect of government spending and investment, and then added the total government spending and investment numbers — which include state and local government — from Reagan’s first term. The result is a significantly better economy, with growth since 2010 averaging 3.2 percent rather than 2.4 percent.”

4comments
Budget & Taxes, Chart of the Day, Economy

Headlines

  • zappa24

    GDP = C + I + G + (X – M). What does the G stand for again (and don’t tell me that government spending crowds out private investment, there has been no evidence of the crowding out effect during the current recession)?

    • pbrower2a

      G is government spending, of course. It does not crowd out the rest until the economy is overheated and further economic growth is impossible for other reasons, most obviously that C (consumption) is crowding out I (investment).

      But “G” does not judge whether the government spending is on education and infrastructure that can foster growth or on wasteful show projects or wars for profit. The conservative solution to budget deficits out of control was to put an end to at least one of the wars for profit (in Iraq) so that people can invest again and so that government can put money into infrastructure and education.

      President Obama may be leading us from a Reagan economy to an Eisenhower economy — and that is a a good direction.

      • zappa24

        The GOP hasn’t followed a true conservative path in quite awhile. Now before I get jumped on for saying that they are losing because they are not conservative enough, that is not what I mean by my first statement. They are a group of right-wing supporting demagogues that pay lip service to conservative ideas but really just put themselves in opposition to whatever the other side is doing. Why? You can attack what the other side is doing, while leaving the opposition without any clear target.

        Yes, G is government spending, and, since crowding out is not going to occur much in an economy that is limping along, there does need to be one more round of infrastructure stimulus (if only to set up the country for the needs of the next few decades).

  • http://twitter.com/YossiGestetner Yossi Gestetner

    GDP at 3.2% (instead of 2.2%) is stilll well below the GDP growth that Reagan delivered in his first few years (even if adjusted for inflation). Besides, it’s spin spending numbers in the first place but that’s for a diff day

Sign In

Forgot password?

Or

Subscribe

Receive daily coverage of the people, politics and personality of Capitol Hill.

Subscription | Free Trial

Logging you in. One moment, please...