You Ask, We Answer: Debunking Federal Budget Myths

Bob from Vacaville, California, wrote in to ask us for some fact checking. He said he hears all the time that the size of the federal government has ballooned under President Obama, and wondered if that could be true given all of the budget cuts.



Great question, Bob. It's something we hear all the time, too – that the size of government has grown in recent years – but it's not true.

Under President Obama's administration, federal spending has been on the decline. Government spending hit a post-World War II high in 2009, under the last budget passed by President George W. Bush (See Federal Budget 101 to understand why the FY2009 budget was signed by President Bush, not President Obama). Since then, federal spending has declined, as many lawmakers in Congress have negotiated for budget cuts in order to reduce deficits. This chart shows federal spending as a share of the overall economy, so we can compare the size of government across years:


The recent decline in federal spending has many economists worried that the U.S. is pursuing the same austerity measures that have prevented Europe from climbing out of its own economic doldrums. Many economists actually recommend that the federal government maintain or even increase spending levels – rather than cutting budgets – in order to stimulate our weak economy. How does the federal government go about stimulating the economy? Check out last week's blog post on job creation.