Stimulus? Out of control spending? Government expenditures actually slowed during the recession

[Kurt_and_Hunter]

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Link (above) to chart of rate of change in expenditures. (You can spend more but have rate of change go down if you are slowing the increase.)

Black line is federal. Red line is state/local. Blue line is combined total government spending on goods and services.

The decline in state spending increases largely countered the federal increase. (Expenditures only. Deficit financed tax cuts which are also part of a stimulus regime are not included.)

During the technical recession the growth of total government expenditures actually slowed. States tend not to deficit spend so their line ends up tracking revenues... they spend whatever they take in and when the economy tanks they take in less. (And since so much local spending is financed by property taxes keyed to property valuation a housing collapse is particularly pointed.)

All in all, the net stimulus effort was a lot smaller than one might assume from just looking at the growth in the national debt. Mostly just an accounting thing of states shifting their responsibilities onto the federal government so that wing-nuts in state governments can then complain about the national debt. "Look! MY state has a balanced budget but those clowns in Washington spend like drunken sailors."

__________________

Krugman:

http://krugman.blogs.nytimes.com/2010/03/11/fifty-one-herbert-hoovers/

Aizenman and Pasricha:

http://www.voxeu.org/index.php?q=node/4707

[depakid]

1. That's what happens when you slash aid to the states from the stimulus

rather than adding enough to it so that states won't have to raise taxes and fees- and cut services and lay off employees.

If not for Susan Collins crowing about cutting pandemic preparedness funding in the middle of a pandemic, this would have been the single stupidest thing that was done (and not fought for).

AND it's going to have political ramifications (and not good ones) for the Democrats in a redistricting election year.

[Kdillard]

2. K and R.

[Supersedeas]

3. Kiran and the morning CNN guests went on and on and on about the RECORD SPENDING