Friday, June 8, 2012

Reagan Was More Of A Keynesian Than Obama

This graph (via Paul Krugman) shows that the conservative saint, Ronald Reagan, was a big spender compared to Obama.  The left side of the graph shows the change in real per capita total government spending during each of their fist terms.  Federal, state and local government spending per capita was more than twice as much under Reagan than during Obama's first term.  Federal spending on defense was increased substantially under Reagan, and state an local spending also increased as a result of revenue sharing.  The increase in total government spending under Reagan provided a huge stimulus to the economy.  On the other hand, the fall in state and local spending during Obama's first term, had the effect of blunting the effect of the federal spending stimulus.  Reagan is regarded as a hero because the economy responded to the increase in government spending, and the Reagan tax cuts by growing.  The budget deficits under Reagan, therefore, also grew dramatically.  The "fiscally responsible" republicans had no problems with deficits under Reagan.  

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