We used to quip that “a Keynesian is a Republican in a recession.” (I know, I know…where do I get such hilarious material!?)
Some of Paul K’s recent work comparing gov’t spending under Presidents Reagan and Obama got me thinking, just how do these gov’t expenditure patterns stack up in recent years, drilling down a bit more into categories?
The results are below, and they actually kinda show that R’s really do get their Keynes on in recession—and they keep it on relative to D’s.
I just averaged real growth rates of gov’t spending, both federal and state/local for four years out from a cyclical trough (i.e., the quarter when a recession started). The 80’s/now comparisons are plotted below and the table compares the last four recessions/recoveries.
President Reagan’s military Keynesianism shows up clearly in the early 1980s, with marginal fiscal drag from the states. In the Great Recession (GR), both President’s GW Bush and Obama kicked up the non-defense federal spending, but what really stands out here is the state/local fiscal drag.
The table shows just how limited total gov’t spending has been over the past four years when you combine the feds with the states. And while the dates don’t line up that neatly, you certainly can’t make the case that it’s D’s Presidents who are the big, fat Keynesians. If anything, they look kind of tepid.
John Lennon once said something to the effect of “everything you think you know is wrong.” He was right.