One of the things that comes up every time we get a GDP report is that government, far from being the main driver of the economy, is actually a big drag on the economy.
Yesterday’s initial Q1 report confirmed that government spending cuts were a big drag (though at least the private sector is picking up the baton).
To appreciate the extent of the austerity under Obama, check out this chart from Naufall Sanaullah at Macrobeat, showing government spending in various categories going back through 2000.
Click to enlarge.
Photo: Macro Beat
Basically, all through the Bush years, government was a positive force on GDP. There were some negative blips here and there, but not steadily.
Under Obama, on the other hand, we had a few quick spikes in government spending, but we’re now seeing a steady drag unlike anything we’ve seen this century.