By Marc Chandler, Global Head of Currency Strategy, Brown Brothers Harriman
Here is a Great Graphic from MarketWatch two months ago. MarketWatch is owned by Dow Jones, and is not known for its left leanings. The information is as stunning as it is counter-intuitive: federal spending has gone up less under President Obama than any president since Eisenhower.
Many friends and critics of Obama want to attribute the 17.9% increase in government spending in fiscal 2009 to Obama, but a closer look at the facts indicate that it was President Bush’s. FY’ 09 began four months before Obama took office.
Obama’s first budget, FY’10 saw federal spending fall 1.8%. His second budget, FY ’11 saw federal spending increase 4.3%. This year’s budget saw a 0.7% increase in federal spending. The FY ’13 budget calls for a 1.3% decline.
This helps explain why the government sector has been and continues to be a drag on GDP. The federal spending is insufficient to offset the drag from state and local governments. This is likely to be evident at the end of the week, with the first look at Q2 US GDP.
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