The Shrinking Government

Floyd Norris:

FOR the first time in 40 years, the government sector of the American economy has shrunk during the first three years of a presidential administration.

Spending by the federal government, adjusted for inflation, has risen at a slow rate under President Obama. But that increase has been more than offset by a fall in spending by state and local governments, which have been squeezed by weak tax receipts.

In the first quarter of this year, the real gross domestic product for the government — including state and local governments as well as federal — was 2 percent lower than it was three years earlier, when Barack Obama took office in early 2009.

The last time the government actually got smaller over the first three years of a presidential term was when Richard M. Nixon was president. That decrease was largely because of declining spending on the Vietnam War.

Also, this:

 Much of the variation in government spending trends can be attributed to military spending. Adjusted for inflation, it has grown at a slow pace under President Obama despite declines in the costs of the Iraq and Afghanistan wars. Nonmilitary spending has risen at about the same pace as it did during George W. Bush’s second administration, and much more slowly than during his first.

Obama nonmilitary government spending increases matches the rate of W. after W. cut back.  That Medicare drug benefit really bloated up government spending.