Krugman: Modifying facts to fit his theory

It's really inexcusable for a scholar with a PhD in Economics, and a Nobel Peace Prize as well, to modify his "facts" to fit his theory that the recession has been prolonged because the stimulus package wasn't big enough.

In his October 10 column, "Hey, Small Spender," Krugman declares that there "never was a big expansion of government spending" under Obama, because cities and states underwent "drastic spending cuts, more than offsetting the modest increase at the federal level." His clear message is that total government spending has fallen, a premise also advanced by Ezra Klein in the pages of the Washington Post.

These statements don't match reality.

According to the Federal Bureau of Economic Analysis, total combined federal, state, and local government spending rose from $5,020 billion in 2008 to $5,345 billion in 2009 -- to a seasonally adjusted average of $5,532 billion in the first half of 2010, which is the most recent available data point.

Also, contrary to Krugman's claim that cities and states experienced "drastic spending cuts," the reality is that state and local governments slightly increased their spending from $2,186 billion in 2008 to $2,189 billion in 2009 to a seasonally adjusted average of $2,224 for the first half of 2010. This equates to a 2% rise during a period with 3% inflation.

If Krugman has another data source, he hasn't shared that with us yet. According to the Bureau of Economic Analysis, the data published by this agency are the "only comprehensive estimates of state and local government activity available on a timely basis."

Krugman also based his premises that government spending "under Obama" has been too low. Yet the recession actually started in December 2007. Since then, combined government spending was $4,637 billion. Thus, from the outset of the recession through the second quarter of 2010, spending has risen 19% in a period with 4% inflation.

So Krugman's premises that there were "drastic cuts" in government spending is untrue, which therefore makes his theory of government spending invalid. If he wants to "prove" that the stimulus wasn't enough, he needs to re-write his hypothesis.

(Hat tip to James Agresti at American Thinker.)