When he (Obama) came into office, he favored a massive injection of new government spending into the economy in the name of “stimulus” — counter-cyclical federal activity aimed at offsetting depressed consumer demand emanating from a recession-battered private sector. The net result provides little if any boost to aggregate demand because the states — and to some extent private citizens — simply pocket the federal money and reduce their deficits and debts. Meanwhile, what federal taxpayers get is a permanent increase in the size of government.
It would be interesting to parse out exactly how Obama has permanently increased the size of government. First, it would be useful if we had some consensus on what the "size" of government actually relates to. Is it the number of people the government employs? This seems unlikely, since, as Krugman has repeatedly highlighted, going back about 20 years, Obama's is the first that resulted in a sustained drop in public employment:
So it's not that. It could be that conservatives think that the $800 billion stimulus itself amounts to a permanent increase in the size of government - in the sense that once we start spending $800 billion, Congress will continually reauthorize that spending level, creating a new baseline. But that hasn't happened - the lion's share of the stimulus program was spend in the first two years, and Congress has made almost no attempt to reauthorize that spending (though, considering the underperforming economy, it certainly should have).
I think the only way it permanently increases the size of government would be by increasing government debt. I don't think this is an intellectual rigorous way of defining the "size" of government - when I think of size of government, I think of what it's permanent spending obligations are (not one-off spending, like the stimulus), or how many people it employs. Still, the stimulus did increase government spending for two years, and that will have to be paid for, so in a limited way it did increase the overall amount of government we'll have to pay for. Still, compared to other major fiscal events, it is minuscule:
So I don't understand the criticism that the stimulus permanently increased the size of government, when so many other recent programs and policies had a much greater increase, with far fewer critical peep to be heard from stimulus-critics. But maybe I'm missing something. Regardless, it would be nice if there were more consensus folks clarified what they mean by "size" of government.
