Means-Tested Spending and Recessions

In his latest column Paul Krugman makes one explicit and one implicit point with respect to conservative claims that the U.S. has been throwing vast and increasing quantities of money down countless rat-holes in fighting poverty:

[F]ederal spending on means-tested programs other than Medicaid has fluctuated between 1 and 2 percent of G.D.P. for decades, going up in recessions and down in recoveries. That’s not a lot of money — it’s far less than other advanced countries spend — and not all of it goes to families below the poverty line.

The implicit point involves the fluctuations in spending on means-tested programs. They are by design counter-cyclical, both because more people meet eligibility standards when they are out of work, and because policy-makers wisely add resources to ensure the need is met. But to hear a lot of conservatives, the temporary rise in means-tested spending during and in the wake of the Great Recession was some sort of sickening and permanent lurch down the Road to Serfdom, or over some imaginary tipping point where the takers outnumbered the makers and would henceforth just take over the country and shut down the private-sector economy entirely.

It’s interesting that the same sort of people who tend to think that way are also by and large violently opposed to fiscal or monetary stimulus to keep the economy out of recession. Even if you think all non-defense government spending is bad, surely the programs that entrap people in the satanic hammock of dependency are worse than, say, infrastructure spending that might keep the unemployment rate down, right? But if there is some sizable body of conservatives out there supporting stimulative spending (or non-austerity monetary policy) to keep down anti-poverty spending, I’ve missed it.

Ed Kilgore

Ed Kilgore, a Monthly contributing editor, is a columnist for the Daily Intelligencer, New York magazine’s politics blog, and the managing editor for the Democratic Strategist.