[Updated] Yes, Paul Krugman, Spending Has Steeply Increased

Brian Riedl / October 13, 2010

In his Monday “Hey Small Spender” column, New York Times columnist Paul Krugman bizarrely denied that federal spending has significantly expanded over the past two years. He asserted that “[t]here never was a big expansion of government spending” and “the big government expansion everyone talks about never happened.”

Yet for his talk about a “fact-free” disinformation campaign, Krugman curiously provides no data on total federal spending. This may be because all official budget data reveals a different story. According to President Obama’s own Office of Management and Budget—the keepers of the official data on government spending—federal spending has just finished its largest two-year surge in nearly 60 years, leaping from 20.7 percent of the economy to 25.4 percent (see Table 1.2 here), the highest spending level in American history outside of World War II.

Overall, Washington is spending 23 percent more today than it did two years ago. Quite a stunning increase given the concern about deficits and fiscal austerity other nations are embarking on. The Congressional Budget Office and Treasury Department show similar figures. So where are the facts, one wonders, to support Krugman’s claim that the federal government has not significantly expanded? (more…)