Does a Nobel prize winning economist have any obligation to demonstrate basic statistical honesty, even when editorializing? In his attempt to support his tedious and wholly unconvincing argument that the public sector has not grown substantially under Obama, New York Times columnist Paul Krugman writes that the narrative of Obama’s profligacy and the failure of Keynesian pump-priming “is a myth. There never was a big expansion of government spending.” (“Hey Small Spender,” New York Times, October 10, 2010).
Krugman is being purposely obtuse. In fact federal spending rose a mind-numbing 34 percent from 2008 to 2009 (the finals for 2010 are not in, but are estimated to be somewhere near the 2009 level). You’d have to go back to 1952 before observing a higher percentage increase in federal spending in one year, and that was mostly a function of the severe federal spending drops in the years immediately after World War II. Indeed, even between 1932 and 1941, the depths of the Great Depression before preparation for World War II began, Franklin Delano Roosevelt raised federal spending by more than 34 percent only once, in 1934. In that year, federal spending increased by 42 percent in a failed attempt to quash a national unemployment rate of 21.7 percent. In that year, federal spending only amounted to 10.5 percent of gross domestic product. By contrast, with less than half of FDR’s unemployment problem, federal spending as a percentage of the economy surged to an estimated 24.4 percent in 2010 (from 21.1 in 2008 last year). Spending for all governmental levels is running at 42.7 percent of GDP in 2010, up from 36.4 percent only two years ago.
