FORTUNE -- One of the main narratives of the government shutdown is about spending. President Obama, first with the stimulus, but later pushing through extensions of unemployment insurance, has seemingly vastly expanded the social safety net.
The interesting thing is that both sides have bought into this narrative. Republicans say the expansion of the safety net and all the spending that went with it is why the national debt is ballooning and why we are facing a crisis. Indeed, Obama's health care law, which some think will push many Americans into federally subsidized health exchanges, appears to be the impetus for the shutdown. Democrats say that Obama was right to widen the social safety net in the face of the Great Recession. What's more, spending money on the poor is good stimulus. They tend to spend the money they get from the government, because they need it.
The other interesting thing about this narrative is that it appears to be wrong. That's the conclusion of a new study from two University of California economics professors, one from Irvine and the other from Berkeley, which was published last week by the National Bureau of Economic Research. The study finds that the spending on the social safety net -- things like unemployment and food stamps and other forms of welfare -- as a percentage of the population did not greatly increase in the Great Recession, at least not relative to other recessions.
That's not to say that government spending didn't increase in the recession. Unemployment insurance and food stamps and other programs like it are generally set to automatically dispense more money when there are more people in need of assistance. But what the professors, Marianne Bitler and Hilary Hoynes, found is that all of the spending increases on social welfare programs under Obama appear because of this automatic spending in response to a worse-than-usual recession, not because of Obama's stimulus package or any policy changes.
One of the most interesting graphs (above) in the study compares federal spending on a number of programs in the second year of Obama's presidency, 2010, to the second year of Reagan's, 1982. Food stamp spending is up, but percent of Americans getting unemployment insurance is down. But everyone knows that Reagan was basically a socialist.
It was a stronger-than-expected jobs report, but we're still a long way from the Federal Reserve's key target of 6.5% or lower.
FORTUNE – If the U.S. Federal Reserve's remarks earlier this week seemed at all vague, today's jobs report should give us a clearer picture of what the central bank might do next to boost the economy.
U.S. businesses added 165,000 jobs in April. Stocks soared and Wall Street cheered, as MORENin-Hai Tseng, Writer - May 3, 2013 11:25 AM ET
Prolonged city shutdowns will likely offset any hoped-for post-storm reconstruction boom.
By Anne VanderMey, reporter
FORTUNE -- There are economic losers and winners after any natural disaster. This week, restaurants, movie theaters, airlines, and department stores will lose billions as Hurricane Sandy leaves millions without power and access to transportation.
Home Depot (HD), on the other hand, is likely to see a bumper quarter, providing generators and heavy-duty flashlights to many of MOREOct 30, 2012 9:49 AM ET
The shock of more than half a trillion dollars in tax increases and spending cuts could send us into another recession. But with a little stimulus, it might be a blessing, not a curse.
By John Cassidy, contributor
FORTUNE -- With the election almost upon us, Wall Street is starting to focus on the possibility that, come Jan. 1, 2013, the economy could hurtle over a "fiscal cliff" consisting of $600 MOREOct 15, 2012 5:00 AM ET
Our tax system helped get us into our economic mess. Now it can help get us out.
By Sheila Bair, contributor
FORTUNE -- As we undertake the annual mind-numbing rite of filling out our tax returns, let us pause to reflect on the role our tax code played in the financial crisis.
What brought us the crisis? Overly leveraged financial institutions made high-yield mortgages to overly leveraged consumers. Financial institutions then concocted trillions of MOREMar 5, 2012 5:00 AM ET
Despite what various politicians and experts say, real productivity gains and real economic growth do not come from stimulus. By Richard RumeltAug 2, 2011 11:28 AM ET
|2 million Facebook, Gmail and Twitter passwords stolen in massive hack|
|Fast food worker: Protest didn't cost me pay|
|Job growth drives mortgage rate jump|
|GM to discontinue Chevrolet brand in Europe|
|Ron Paul: Bitcoin could 'destroy the dollar'|