Paul Krugman does an excellent job of exploding this bone-headed myth:
Here’s what you need to know...There never was a big expansion of government spending. In fact, that has been the key problem with economic policy in the Obama years: we never had the kind of fiscal expansion that might have created the millions of jobs we need.It's obvious that he's correct, though this obvious fact is obscured by all of the hysterical deficit-hawking that we get from Republicans and Democrats alike.
Ask yourself: What major new federal programs have started up since Mr. Obama took office? Health care reform, for the most part, hasn’t kicked in yet, so that can’t be it. So are there giant infrastructure projects under way? No. Are there huge new benefits for low-income workers or the poor? No. Where’s all that spending we keep hearing about? It never happened.
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