Paul Krugman Thinks Obama is a “Small Spender”

| by CEI

By Lee Doren

Paul Krugman wrote a head-scratching column Sunday titled, “Hey,

Small Spender.”  In the column, Krugman not only argues that President Obama’s stimulus package was too small, but he even claims that Obama and his administration did not create a bigger government. He asserts that people think Obama is a big spender as a result of “a disinformation campaign from the right.”

One might wonder how Krugman manages to argue something that is proven false by simply looking at the massive increase in government spending, and increase in government regulations. (See Wayne Crews’ 10,000 Commandments for a reference on regulations.)

Well, Krugman frames the issue as follows:

Ask yourself: What major new federal programs have started up since Mr. Obama took office? Health care reform, for the most part, hasn’t kicked in yet, so that can’t be it. So are there giant infrastructure projects under way? No. Are there huge new benefits for low-income workers or the poor? No. Where’s all that spending we keep hearing about? It never happened. “

It is difficult to figure out whether to laugh or cry after reading the above quote. According to Krugman, because the healthcare bill hasn’t “kicked in yet,” supporting its passage can’t label someone a supporter of big government. Moreover, the fact that the stimulus was squandered and mismanaged can now be used to make Obama immune from being labeled a big spender. Apparently, only if the stimulus money is spent efficiently like a price-coordinated market (which isn’t possible) can one be labeled a supporter of big government. Lastly, supporting unemployment benefit extensions, or the increase of existing entitlements doesn’t count for Krugman.

To be fair, spending on safety-net programs, mainly unemployment insurance and Medicaid, has risen — because, in case you haven’t noticed, there has been a surge in the number of Americans without jobs and badly in need of help. And there were also substantial outlays to rescue troubled financial institutions, although it appears that the government will get most of its money back. But when people denounce big government, they usually have in mind the creation of big bureaucracies and major new programs. And that just hasn’t taken place. [emphasis added]

So, in the end, Paul Krugman concedes that spending increased because Krugman thought it was necessary. However, any existing bureaucracy that increased its power, like the EPA, does not even register on Krugman’s radar.

As Thomas Sowell mentioned recently, this is a “heads I win, tails you lose” approach to economics.  When the stimulus has demonstrated to be an abject disaster, claim it was because the stimulus was too small.