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Former White House Council of Economic Advisers Chairman Edward Lazear on the government’s growth in spending under the Obama Administration.
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This chart of what has actually happened with spending since -- president came in.
In 2000 -- it's caught up by about twenty to 25%.
And it stayed there year after year so we can't agree about what is actually -- Happen that in terms of spending how -- we agree about what should happen -- says former chairman.
The president's council of economic advisors Edward -- -- joining us.
On the far -- -- -- you saw that interview on Meet the Press yesterday -- but but when I heard the president say that that he's cut spending by.
By a trillion dollars in 2011.
I was wondering what -- -- was off.
And -- -- -- the yellow I don't know what is reference point -- but he certainly didn't cut spending if you go back to that period as they 2007.
The year before the recession.
At that point we spent less than 20% of our GDP.
In government spending.
And if you look at the period during the Obama term it's been at 24%.
Its highest point 5% so.
It's certainly hasn't come down and -- so I don't I don't know that.
And what's happened as an -- looking right -- federal outlays right now we have put it back on the screen if we want is that.
That we had that that big drop because of the stimulus in 2009 which agreed was part Republican or Democrat -- just stay there if did you -- down to just stay there in fact it went up in 2011.
Not down so I think that's the point the baseline has increased so we're we're now have to grow accustomed to this and that's why the president -- always new taxes.
Well that's right if you look at the change in the deficit over the past few years you know we've gone to upwards of 9% deficit or so per year.
And it.
Part of that of course is a result of the recession when you have a recession tax revenues -- so they fell from eighteen and a half percent down to about 15% but the big the bigger component -- it was just one you mentioned which with the discretionary increasing spending.
From twenty point eight percentage when he -- -- -- that's the easiest to cut and and yet we just heard today I think god knows what kind of -- we're gonna end up with but these Windmills subsidies that would -- have failed terribly.
It's more expensive to get energy from wind mills today that it was -- -- four billion dollars and to twenty years ago when the subsidies began.
And yet we just agree did to spend more money another year of spending on -- -- That's right well -- looked at this each of the budget items that we've it increased over the past few years and if you look at it specifically virtually every agency has had a significant increase in the size of their budget.
And again I think this is not a stimulus -- this is really.
A desire of the president Dan the president's party to grow the size of government this is something they wanted to do for a long time.
And debt 20092010.
With their opportunities do -- and they did it are so that's that's kind of where we are right now the question then is.
You know what do we do from here on and I think they're bloody things that we can do that's not to say that they will get done.
Okay but let's talk about what's realistic about getting done and the president also said yesterday said -- reporting -- -- you're not gonna cut your way to prosperity.
And I guess he again believes that the government spending more -- you can spend your way to prosperity.
We're all hoping for prosper 2013 and let's hope it is is it conceivable that despite these tax increases all of them.
We won't going to be -- but all attacks agrees that we could still get a prosperous 2013.
I don't see how -- you know the reality is we haven't had a prosperous 200910.
Eleven or twelve so -- -- raising taxes and expecting for prosperity in the future is not a path to success.
My view and I think it's the one that most economists would have is that.
In in terms of the longer and the only way to get the budget under control -- on the spending side if you take the president's numbers which is what -- like to do.
President this is forecasting that in a couple of decades will be spending upwards of about 28% of GDP through the government.
As a result of entitlement growth.
In order to finance that on the tax side you would have to increase the taxes of the average American by about 50% so everybody's taxes would have to go up by 50% in order to finance that.
That's not a recipe for strong long long term growth.
Okay -- -- the year former chairman of the white house council of economic advisors -- great to talk to thank you -- let's open right.
For prospers 2013.
Dead happening you and happy new year.
Take care that's what everybody's.
