The media has focused on the first half of President Obama's gaffe last week in which he declared that the "private sector is doing just fine," in comparison to state and local governments that, according to Obama, are suffering.
The media, rightfully, has pounded Obama's delusional comment that the private sector is succeeding. Indeed, with record high and persistent unemployment and continuing liquidity problems, other than a few Wall Street bankers on the east coast and tech barons on the west coast, most of us in middle America are suffering.
But what the media missed is that Obama's claim of pain in the public sector is also misleading. As Investor's Business Daily reports here, spending by state and local governments since the start of the recession has grown a robust 14%. State general fund spending grew last year, and is expected to rise this year as well. Tax receipts for these entities grew 4.5% in 2011, while the overall economy for the same period grew just 1.7%. And in 2012, state and local tax revenues are now expected to rise above receipts in the peak year of 2008.
So, Mr. Crocodile tears, let's get real about who is suffering in this recession. It is not the bloated public sector.