Krugman: Big spending Reagan, austere Obama.

[pampango]

Reagan, Obama, Austerity

A followup on the effects of austerity at the state and local government level, which have led to a decline in government purchases of goods and services that stands in stark contrast to earlier recoveries. I pursued this a bit more, and have a startling calculation to offer.

Let’s look at the comparison between government purchases in the Reagan “Morning in America” recovery and the current recovery:



At this point in the Reagan recovery government spending had risen 11.6 percent; this time around it’s actually down by 2.6 percent. So if we had followed the Reagan track, spending would be almost 15 percent higher.

So what my calculation suggests is that if it weren’t for austerity, American style — the result of the failure to provide sufficient aid to state and local governments — we might well have an unemployment rate right now that was lower than unemployment at the comparable stage of “Morning in America”.

http://krugman.blogs.nytimes.com/2012/03/03/reagan-obama-austerity/

[libinnyandia]

1. Republicans care more about defeating Obama than they care about the American people.

It's too bad more people don't realize that.

[ProSense]

2. This is

a good contrast. Republicans refuse to support government spending.

Still, as Krugman pointed out in an earlier piece, this does not include safety-net spending:

Now, this doesn’t include safety-net spending, which has indeed soared in this slump. But actual government purchases have been uniquely weak, largely because of budget distress at the state and local level.

http://krugman.blogs.nytimes.com/2012/03/02/austerity-american-style/