Thursday, February 14, 2013

Per Capital Government Spending Chat Draws Fire

Economist Mark Thoma, spurred by commentary from Paul Krugman regarding President Obama’s real government spending, created a graph to compare Obama’s annualized growth in real per capita government spending with that of the last six presidencies. The result, which reflects the Obama Administration’s comparatively low spending, created a small storm among partisan and non-partisan economists regarding the breakdown of the numbers and Obama’s perceived austerity in the face of economic crises. For more on this continue reading the following article from Economist’s View

Via email:
Seeing the Krugman commentary comparing real government spending under Obama and Reagan made me curious about what it looks like if you express it in per capita terms?  In particular, how does the Obama period compare with other presidencies in terms of penury/austerity versus spendthriftness?
To compare presidencies, I did the calculation two ways.  One starts in the quarter before the president was elected (e.g., 2008Q4), the other starts in the first quarter of the presidency (e.g., 2009Q1).  (The ARRA probably had some effect in Q1, but most of the change was simply economic conditions that the incoming president had nothing to do with, so I think I prefer the Q1 to Q1 method). Ranking since Johnson (starting in 1968), and using the first-quarter comparisons, and calculating growth under Obama through 2011Q4, Clinton is the most austere, followed by Obama.  The most spendthrift are (1) Nixon-Ford, (2) Reagan, and (3) Bush II.   The figure is pasted below:

This blog post was republished with permission from Economist's View.

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