February 10, 2011
NPR told listeners that: “the federal budget boosted spending during the recession, and now it’s widely acknowledged that spending has to come down. The questions are how soon and by how much (emphasis added).”
The term “acknowledged” implies that it is a fact that spending must come down and that people in policy debates are just now recognizing what it is known to be true. Of course it is not a fact. While federal spending did rise in the downturn, primarily to offset budget shortfalls at the state level and to pay for counter cyclical programs like unemployment insurance and food stamps, there is no reason in principle why federal spending could not remain permanently at its current level. Even at 24 percent of GDP, the share of government spending in the economy in the United States would still be near the bottom among wealthy countries.
The producers at NPR may want government spending to come down, but this is just their opinion of the direction that the country should be taking. There is no need to cut government spending that exists for anyone to acknowledge.
Thanks to Michele Mattingly for calling this to my attention.
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