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	<title>Obama Pundit &#187; Federal Spending</title>
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		<title>The Obama Spending Spree</title>
		<link>http://www.obamapundit.com/2009/06/10/the-obama-spending-spree/</link>
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		<pubDate>Wed, 10 Jun 2009 09:14:02 +0000</pubDate>
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				<category><![CDATA[Federal Spending]]></category>
		<category><![CDATA[Obama Pundit]]></category>
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		<guid isPermaLink="false">http://www.obamapundit.com/?p=191</guid>
		<description><![CDATA[by Obama Pundit
It is almost laughable by now, but here&#8217;s a story by Reuters (complete with the straight-faced headline: Obama seeks fiscal responsibility mantle) about how President Obama is now trying get the federal budget under control.
How Obama can get away with this without enduring automatic ridicule is simply amazing, especially when one looks at where he currently stands when compared to [...]]]></description>
			<content:encoded><![CDATA[<p><em>by Obama Pundit</em></p>
<p>It is almost laughable by now, but <a href="http://www.reuters.com/article/governmentFilingsNews/idUSN0938720120090609" target="_blank">here&#8217;s a story by Reuters</a> (<em>complete with the straight-faced headline: Obama seeks fiscal responsibility mantle</em>) about how President Obama is now trying get the federal budget under control.</p>
<p>How Obama can get away with this without enduring automatic ridicule is simply amazing, especially when one looks at where he currently stands when compared to the other great spenders in modern American history.</p>
<p>As it turns outs, Obama has presided over the third-largest year-to-year peacetime increase in the size of the federal government since 1901 and the biggest since fiscal year 1941.  Federal government outlays in 2008 were $2.9 trillion and will rise to $3.997 trillion in 2009, according to government estimates.  Have a look:</p>
<p><strong><span style="text-decoration: underline;">Top 10 Increases In Outlays Over Previous Fiscal Year, 1901-2009</span> (source: <a href="http://www.whitehouse.gov/omb/budget/Historicals/" target="_blank">Office of Management and Budget</a>)  [<em>Note:  Excludes fiscal years covered by WWI, WWII and the Korean conflict, when the country was mobilized for major warfare]</em></strong></p>
<p><em><strong>1. 1941 &#8211;</strong> +44.2 percent (FDR)</em></p>
<p><strong>2. 1934 &#8211;</strong> +42.2 percent (FDR)</p>
<p><span style="color: #ff0000;"><strong>3. 2009 &#8211;</strong> +34.0 percent (Obama)</span></p>
<p><strong>4. 1939 &#8211;</strong> +33.6 percent (FDR)</p>
<p><strong>5. 1949 &#8211;</strong> +30.4 percent (Truman)</p>
<p><strong>6. 1932 &#8211;</strong> +30.2 percent (Hoover)</p>
<p><strong>7. 1936 &#8211;</strong> +28.3 percent (FDR)</p>
<p><strong>8. 1975 &#8211;</strong> +23.3 percent (Ford)</p>
<p><strong>9. 1967 &#8211;</strong> +17.1 percent (LBJ)</p>
<p><strong>10. 1980 &#8211;</strong> +17 percent (Carter)</p>
<p>This is the historical record (you can see why Democrats acquired the big-spending label over the years!)  A closer look at the context of some of the spending figures sheds some light on Obama&#8217;s profligacy. </p>
<p>The top figure (1941) has a fairly simple explanation:  The U.S. was ramping up in preparation for its pending involvement in World War II.  A quadrupling of the defense budget accounted for all of the increase.  Fairly understandable.</p>
<p>The second figure (1934) came during the depths of the Great Depression:  1933 saw nearly 25 percent unemployment, thousands of banks had gone under and real GDP had fallen 29 percent since 1929.  Makes some sense to take drastic action (even though most now think it didn&#8217;t really work).</p>
<p>But what about Obama&#8217;s spending excuse?  Does it hold up?  Or, is he just refusing to let this crisis go to waste, as his Chief of Staff once famously put it?</p>
<p>After all, when Obama took office, the unemployment rate was measured at just one-third that of 1933&#8217;s disastrous total.  At 7.6%, it was at the same level as the peak of the historically mild 1990-91 recession.  It now sits at 9.4%, the most since 1983, but still way below the level of 1933.    <em>Over 9,000</em> banks failed during the 1930s;  the last 18 months have seen merely several <em>dozen</em> banks fail.    The rate of decline in the GDP is slowing even before the vast majority of Obama&#8217;s appropriated funds are spent. </p>
<p>Certainly, some bold action by Obama was warranted and understandable given the seriousness of the financial crisis.  But did the crisis&#8211;centered primarily on the collapse of the housing market&#8211;justify a 34% increase in federal spending, more than FDR&#8217;s increases during every year of the Depression save one?   Did it warrant a greater increase than the one implemented by Truman when he decided to create the security apparatus needed to save Western Europe from Soviet expansionism?   Did it demand exceedingly more strident action than the deeper (though not longer) recessions of 1974-75 and 1981-82?  I think not.</p>
<p>All this would be a little more palatable if Obama would at least <em>attempt</em> to justify it without acting like we are all idiots.  The line he constantly recites, the one claiming his proposals will <em>save or create</em> x-amount of jobs, is pure balderdash and unbecoming of a serious politician.  When his logic falters, he likes to rest on the election results, letting everyone know that &#8216;he won&#8217; and therefore (it seems) he doesn&#8217;t have to justify anything to anyone anymore.</p>
<p>But the vast majority of Americans didn&#8217;t vote last November for an instant 34 percent increase in the size of the federal government and I&#8217;d wager that such an increase would have gone down to a devastating defeat if placed on the ballot.  One can argue that circumstances in the economy changed after election day and so Obama had to take appropriate corrective action.  But that still doesn&#8217;t mean Americans voted specifically for such a radical change.  Hence, a real debate about the size and scope of this action was in order.  After all, it&#8217;s the people&#8217;s money. </p>
<p>Unfortunately, we didn&#8217;t get that.  Most of the spending bills were rammed through Congress <a href="http://www.cnsnews.com/public/content/article.aspx?RsrcID=43478" target="_blank">before they were even read by lawmakers</a>.  This was the largest spending increase in 68 years, but the deliberation process was about as serious as a city council proposal to honor a local spelling bee champion. </p>
<p>The proper level of the federal government&#8217;s involvement in the life of the average citizen has always been a big issue in American history.   The idea of a central bank and the use of specie vs. paper money were constant matters of contention in the 19th century.  The union was torn apart over slavery and states rights.  Various Presidents have had to first convince the country to send its sons to wars in faraway lands, then mobilize those left at home to produce the weaponry needed to win those wars.   Other Presidents called on the federal government to focus its efforts on alleviating social ills like poverty and racism.  Most of the time, some kind of consensus on the role of government was eventually reached.     </p>
<p>We are at one of those junctions right now.  I believe that Obama is proposing what amounts to a fundamental shift in the relationship of the federal government toward the average citizen.  Does Obama believe that this is what is happening?  I&#8217;m not sure, because there is little or no debate on the issue and he seems to feel no need to address it.  With the GOP in such a weak state and the media firmly in his corner, no one wants to call him on it.  The previous President was excoriated for not leveling with Americans about the War on Terror.  Pundits pleaded with him to ask Americans to sacrifice, but he did not.  This President is not leveling with the people about <em>his </em>plans and he certainly is not asking for sacrifice.  He just prints the money he needs and hopes for the best.  So what&#8217;s the difference?   </p>
<p>Is it possible that the largest spending increase in 68 years will <em>not</em> come at the expense of the pre-2009, consensus view of the proper size and role of the federal government?  Is that realistic?  Will things go on as before, only bigger? </p>
<p>I think we all deserve an answer on this, one way or another.  Because most of us may not want it.</p>
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