In the wake of Wednesday's news that the economy contracted slightly in the last three months of 2012, Senate Majority Leader Harry Reid laid the blame on budget cuts.More at that top link.
"The economy was rejecting the austerity and brinksmanship," he said.
That theme — that spending cuts are putting economic growth at risk — has been gaining traction these days, particularly among those on the left.
Rep. Chris Van Hollen, D-Md., said the GDP drop showed that pushing "big austerity measures now will hurt the recovery."
Former Obama economic adviser Jared Bernstein asserted U.S. policy has been based on "austerity at (a) time when we need a fiscal push."
And the liberal Center for American Progress complained that "fiscal austerity threatens the U.S. economy."
On the surface, it might look that way.
In its GDP report, for example, the Bureau of Economic Analysis said government spending dropped 6.6% in Q4. And unless Congress acts, more than $1 trillion in automatic spending cuts will start to kick in as part of the so-called sequester.
But dig a little deeper, and there's little to back up all this austerity talk.
According to monthly spending data from the Treasury Dept., total federal spending — which includes transfer payments and other federal outlays not counted by the BEA — increased by $98 billion in Q4 compared with Q3. And spending was up $31 billion when compared with Q4 2011.
For the entire year, spending in 2012 was virtually unchanged from 2011, and was up $86 billion over 2010, a year when the government was still spending stimulus money in earnest.
Plus, the "fiscal cliff" deal worked out between President Obama and the Republicans actually added almost $50 billion to planned spending in 2013, and a total of $332 billion over the next decade, according to the Congressional Budget Office.
Almost half of the 2013 increase will go to pay extended unemployment benefits, which Democrats have long argued are highly stimulative.
Reid himself has said that unemployment benefits "help our economy because recipients spend the cash they receive on the things they need right away."
In addition, even if the "sequester" should go through, federal spending will continue to climb.
No Real 'Cuts'
In fact, if nothing else changes, spending in 2013 will be $3.6 trillion, an increase of nearly 2% over 2012, according to data from the CBO. That's because the sequester's "cuts" are actually just reductions in planned spending hikes.
And see Holly Robichaud, at the Boston Herald, "Need to face reality":
This week Senator Mary Landrieu claimed that our nation doesn't have spending problem. This U.S. Senator is denying that we face $16 trillion in debt. That equals $146,000 per taxpayer. I don't have an extra $146,000 to give to the federal government. Do you? This announcement of Landrieu comes on the heals of the President telling Speaker Boehner there is no debt problem.Well, don't hold your breath. The left lives on lies. Pure lies. All the time. From Obama down to the most disgusting trolls of the progressive fever swamps.
I know that liberals want to tax the rich. Even if we tax the rich 100%, that won't make a dent in our debt. This money is going to be paid by the middle class and future generations unless we rein in spending.
It is time for some honesty from the Democrats!