Recently, there was a political firestorm over an article Rex Nutting wrote about the President Barack Obama spending binge, which suggested that it did not really happen and that Obama has spent less than any previous President since Dwight Eisenhower was in office. The article went viral on Facebook and pushed PolitiFact to rate the validity of the article, which they rated “mostly true”. Since that time the article has been lambasted by those on the right claiming that Nutting used faulty methodology and a baseline which ignored the stimulus package Obama signed into law in 2009 (instead assigning that to George W. Bush). I wanted to take a look at the data and run my own analysis to see if what Nutting was suggesting is true. What did I find? Was Nutting correct? Did the Obama spending binge really happen or not?
The methodology I used should alleviate the concerns that many on the right have claimed were faulty on the part of Nutting. I used data from usgovernmentspending.com. I downloaded their spending data in the 20th century in both total dollars in billions and total dollars in billions adjusted for inflation using 2005 dollars. From the data I ran a separate analysis on each data set.
To alleviate concerns over assigning 2009 spending to George W. Bush instead of Barack Obama and similarly to previous presidents I took average spending levels for each president during their term only. For example, the spending number assigned to Barack Obama was the average of government spending during the years 2009 – 2012. Similarly, George W. Bush’s spending number was the average of government spending during the years of 2001 – 2008.
I measured spending levels against two baselines. The first baseline was the average spending level from the previous 16 years. I chose this baseline because when I run analysis for my job, I try to take at least four previous periods of data to get a good baseline. Since we are measuring spending under a president, I used four presidential terms (16 years) as my baseline. The second baseline measured was simply comparing the average spending levels to the previous president in office.
So what did my analysis discover? I admit the results surprised me.
First, let’s look at the average government spending levels by president. The data shouldn’t surprise anyone. Each successive year, the next president spent more than the previous president. Looking at nominal dollars (not adjusted for inflation), the rise appears to be exponential. Whereas when we look at the data adjusted for inflation in 2005 dollars the rise appears linear.
Next, let’s look at the percent increase compared to the 16 year baseline. This is where things really started to get interesting.
These graphs are interesting for several reasons. First, you can clearly see dips and peaks from president to president and get a clear understanding of which president spent more compared to their previous 16 year baseline versus another president. Second, the impact of the growth of the economy alongside spending increases is really displayed well when you compare the two graphs. Looking at nominal dollars, President Reagan increased spending compared to his 16 year baseline by 173.6%! That is highly misleading though, because the economy rapidly expanded during his presidency. When adjusted for inflation, the spending increase compared to his 16 year baseline is only 41.2%, which is much more in line with what other presidents did historically.
Finally, let’s look at the percent increase compared to that president’s previous president’s spending levels.
These graphs really don’t enlighten us much. They show the same peaks and troughs that the 16 year baseline graphs show us but at a different scale.
So what does all of this mean? Did the Obama spending binge really happen? Was Rex Nutting right? What it boils down to is your interpretation of the results. There is no denying that Obama has spent more than any other president in U.S. history. That is a fact, but that also holds true for every president since Herbert Hoover. What is interesting, and honestly surprised me, is that President Obama has increased the amount of government spending by a lesser percentage than any previous president since Hoover when adjusted for inflation. Does that mean Rex Nutting was right? Does that mean the Obama spending binge didn’t really happen? I’ll leave that up to you. Let me know what you think!