Krugman Loves Him Some Reagan

From “Reagan Was A Keynesian,” Paul Krugman, NYT:

“They [the GOP] love, in particular, to contrast President Obama’s record with that of Ronald Reagan, who, by this point in his presidency, was indeed presiding over a strong economic recovery. … So let’s look at that comparison, shall we?

“For the truth is that on at least one dimension, government spending, there was a large difference between the two presidencies, with total government spending adjusted for inflation and population growth rising much faster under one than under the other.  I find it especially instructive to look at spending levels three years into each man’s administration…compared with four years earlier, which in each case more or less corresponds to the start of an economic crisis.  Under one president, real per capita government spending at that point was 14.4 percent higher than four years previously; under the other, less than half as much, just 6.4 percent.

“O.K., by now many readers have probably figured out the trick here:  Reagan, not Obama, was the big spender.

“Why was government spending much stronger under Reagan than in the current slump?  ‘Weaponized Keynesianism’  —  Reagan’s big military buildup — played some role.  But the big difference was real per capita spending at the state and local level, which continued to rise under Reagan, but has fallen significantly this time around.”

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4 comments on “Krugman Loves Him Some Reagan

  1. DailyDisgust says:

    Rational people understand that you cannot expect growth in a period of constrained spending.

    Heck, even irrational people like Mitt get it: “Well because, if you take a trillion dollars for instance, out of the first year of the federal budget, that would shrink GDP over 5%. That is by definition throwing us into recession or depression. So I’m not going to do that, of course.”

    • Demand has to come from somewhere, and right now, we need more demand from the public sector. Mitt has to be careful how open he is about this with the Tea Party types. They’ve been wrongly led to believe that the more and faster we cut, the better off we are.
      I don’t believe that Mitt is irrational. But he has to deal with, and win the votes of, a lot of irrational people who don’t understand very basic economics. They don’t get that what’s good for a household isn’t good for a country.

  2. momshieb says:

    My big question remains: where the hell are the progressive leaders and why are THEY not screaming this information from the rooftops?
    My theory? Because if they did they would be upsetting their own big donors. Time, past time, for a third party to emerge.

    • I agree. The GOP is in bed with Wall Street in a tight embrace. The Dems may not be in that embrace, but they’re under the covers with them all the same. Look at Chuck Schumer refusing to support getting rid of “carried interest.” Listen to what Bill Clinton’s saying defending Bain. He wants to keep his Wall Street friends supporting his Global Initiative and ready to write checks for Hillary 2016.
      Nobody represents us regular working folks, trying to pay this month’s bills and have something for retirement.

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