The Barack Obama big spender myth

A recurring theme in American politics right now is that Obama's wild, uncontrolled spending is dragging a once prosperous nation into a future of indentured servitude. The reality, Neil Macdonald writes, is much different.

America's nanny state, though, is not without its exploding cost

With budget deficits in all but four of the last 33 years, U.S. debt is at an all-time high. But you can't blame that on Barack Obama. Government spending on his watch has been the least, on average, of any president since Dwight Eisenhower, according to fact checkers, and the deficit has been coming down. (Associated Press)

I'm generally against using any word invented during my lifetime. But "meme" actually does seem to best describe the ill-informed discussion here about Barack Obama and spending.

A meme, according to Webster, is "an idea that spreads from person to person within a culture."

And the meme here, at the moment, is that Obama's wild, uncontrolled spending is dragging a once prosperous nation into a future of indentured servitude.

Obama's opponents are constantly inventing new apocalyptic metaphors. Mitt Romney, when he was running for president last year, settled on "Obama's debt and spending inferno."

And Americans seem overwhelmingly to believe them — by more than 80 per cent, according to some polling.

The assumption also seems to underpin a lot of popular journalism. Articles here on the deranged political brinkmanship of the past few weeks would often nod toward the idea that, whatever the tactics employed by the Tea Party extremists, their primary concern about America's disastrous fiscal escalation was correct.

Well. To quote the late Sen. Daniel Patrick Moynihan, everyone's entitled to his own opinions, but not to his own facts.

And the fact is that while government spending here did seem out of control just a few years ago, it is now declining, two years in a row in fact. So is the deficit, sharply.

Hey, big spender

Also, according to the Pulitzer-prize-winning fact checkers at PolitiFact, when compared to the spending of the nine presidents who preceded him, Obama's rate of spending in his first term in office ranks at or near the bottom of the list.

Whether in raw dollars or adjusted for inflation, both George W. Bush and Ronald Reagan increased spending at a much faster clip than the current president, who is so commonly described by his conservative opponents as a free-spending socialist.

Republicans, like Ohio congressman Steve Chabot, shown here at a town hall meeting in Montgomery, have been making political hay out of U.S. budget problems this past year. Though lately the focus of the attack may be shifting as spending and the deficit continue to decline. (Associated Press)

Now, it is true that statistics on the U.S. economy comprise a dense, confusing undergrowth that most people, including most journalists, would rather not enter.

And those who are fearless enough to crawl in sometimes emerge with different conclusions.

After PolitiFact published its findings last year, and Obama's officials tweeted them, the Washington Post's fact-checking department, which is equally respected, rendered a somewhat different view. (Both organizations used data from the non-partisan Congressional Budget Office and the Office of Management and Budget).

The Post chose to judge Obama's spending in relation to the size of the U.S. economy.

By that measure, spending in 2009, when Obama took office, jumped from 20.8 per cent of GDP to 25.2 per cent, a historic high, but one that should be seen against the backdrop of a tanking economy.

Federal spending has since declined to 23.3 per cent of GDP in 2013 – still above the 40-year average, according to the CBO, but on a precipice to continue falling for the next few years, at least as a proportion of the country's economic output. 

Still, the Post's assessment also defied the whole idea — the meme — that spending under Obama is "out of control."

The nanny state

The idea of Obama as a pathological spender seems to have originated early in his administration.

His detractors, especially those in the Tea Party, blamed him for two pieces of policy they despised above all else: the $787-billion stimulus package of early 2009, and the massive Wall Street bailout a few months earlier.

Thing is, the Wall Street bailout was the creation of staunch Republican and self-described "market guy" George W. Bush. He signed it into law on Oct. 3, 2008, a month before Obama won the White House and nearly four months before Obama took office.

If the stimulus package made Obama a socialist, what exactly did rushing to rescue grossly negligent private banks with hundreds of billions of taxpayer dollars make George W. Bush? (Or, for that matter, Bush's earlier decision to provide American seniors with subsidized drugs?)

In any event, the blazing central fact is that the 2008 economic meltdown, and not any single president, was responsible for the crash in revenues and the balloon in U.S. debt whose effects are being felt to this day.

Bush did what he had to do. So did Obama. But in the years since, Obama has brought both spending and the deficit down considerably.

Still, a serious spending problem remains. It's just a lot of people here don't want to talk about that aspect of it at all, let alone see it remedied.

Social Security, America's version of the Canada Pension Plan, and Medicare, under which the government pays health-care costs for Americans over the age of 65, are indeed careering out of control.

They become less sustainable every year, as the boomer generation retires and falls back on government support. Those entitlements are growing at a rate of six and seven per cent a year, well above everything else.

For obvious reasons, most Americans don't want to discuss hacking those particular programs, aging Tea Partiers included, there being no greater economic or political force than self-interest.

So, for now, Americans are taking shelter in their pet misconceptions. For example, that they are only taking out of Medicare and Social Security what they paid in over the years.

Or that sufficient savings can come from cutting "waste, fraud and abuse." Or, among conservatives, that cutting taxes will cause wild economic growth and solve everything.

Obama says his four-year old law, Obamacare, will bring health-care costs down. Republicans say it'll do the opposite. But the Obama-spender meme is embedded in that subject, too.

Recently, CNBC polled two groups. One group was asked about Obamacare, and 46 per cent of respondents were opposed. A second group was asked about the Affordable Care Act, and 36 per cent disapproved.

Obamacare, of course, IS the Affordable Care Act.

The U.S. government almost certainly needs to spend less and raise taxes if the entitled American way of life is to continue.

As Mark Zandi, chief economist at Moody's Analytics puts it: "I don't think we can realistically grow out of our long-term fiscal problems. We will need more long-term fiscal restraint and tax revenues."

Barack Obama will almost certainly be an ex-president by the time entitlements are fixed, if they ever are. And Americans will no doubt find someone else to blame for the underfunded nanny state they treasure.

U.S. government spending projections from Congressional Budget Office, 2013. (U.S. Congressional Budget Office)


Neil Macdonald is a former foreign correspondent and columnist for CBC News who has also worked in newspapers. He speaks English and French fluently, as well as some Arabic.