If numbers make your head swim, look at this chart. I have simplified government spending in a way that is comprehensible in a glance … More…
“Federal deficits were caused by Bush’s tax cuts for the rich.” That was a typical response I got from a previous post, “Federal Spending for Dummies.” It struck me as a legitimate reaction. After all, President Bush and a Republican-controlled Congress cut income tax rates for all workers in 2001. Specifically, they reduced the top marginal income tax rate from 39.6 percent to 35 percent. Additional tax-reduction legislation was passed in the ensuing years which lowered various tax rates for America’s most productive workers. The suggestion was that government revenues shrunk because of these tax cuts, depriving the treasury of funds and driving up the deficit to unprecedented levels. And yet an analysis of the data reveals liberal critics have it wrong … More…
By Tom Quiner
Is the government spending too much? You be the judge.
In 1980, the federal government spent $2601 per citizen in 1980 dollars.
By 2009, the federal government was spending $5002 per citizen, in inflation-adjusted 1980 dollars.
We just about doubled spending per citizen. Are we twice as well off?
By Tom Quiner
I have a simple and effective way to assess federal spending. I call it Federal Spending for Dummies.
Use it as a handy voting guide tomorrow when you head out to vote.
Here’s how it works. I take the total amount of money the federal government spends each year, including off-budget items like social security. I adjust it for inflation, putting everything in 1980 dollars. Then I divide by the U.S. population for that year.
We end up with the average amount of money spent per citizen.
“Federal Spending for Dummies” levels the playing field by creating a simple way to accurately compare spending from year-to-year, from decade-to-decade.
Let me put this in perspective for you. In 1980, the year Ronald Reagan was elected President, our country spent an average of $2601 per citizen.
By 2009 the number had increased to $5002 per citizen. We’ve witnessed a stunning increase since Democrats regained congress in 2006. The Nancy Pelosi Congress has increased that number From $3642 in 2006 to $5002 in 2009.
Presidents get too much credit and too much blame when it comes to budgets and deficits. After all, it’s Congress that actually has the power to spend the money.
If you’re comfortable with the direction of the country and with this level of spending, your choice is clear. Vote Democrat.
If you’re concerned that this level of spending is unsustainable, you’ve got to consider Republican candidates. If you’re hesitant about Republicans, I understand. The Gingrich Congress of the 90’s did an admirable job restraining spending. They helped to get our budget back into a surplus. But the spending really ratcheted up in the Dennis Hastert years. Republicans paid a huge price in the 2006 elections for this level of profligacy.
But now Republican spending looks like chump change compared to the Pelosi years.
It’s time for a course-correction. Look at my Federal Spending for Dummies chart above. It’s clear we’ve got to do something fast. Republicans, can we trust you?
I believe the answer is yes. Why? Because the Tea Party Movement will keep them honest … or throw them out.
“I am confident we can get government off our backs and out of our pockets …” Ronald Reagan, November 3, 1980
“Read my lips, no new taxes.” George H. W. Bush, August 18, 1988
“The era of big government is over.” William Jefferson Clinton, January 27, 1996
“We must balance the federal budget.” George W. Bush, January 23, 2007
“That’s why today I’m pledging to cut the deficit we inherited by half by the end of my first term in office.” Barack Obama, February 23, 2009
Three Republican Presidents and two Democrats have been united in their rhetoric: we must be concerned about excessive deficits, taxation, and government spending. Each pledged to do something about it in their own way.
Collectively they have failed us. Spending is out of control.
Joe Sixpack is struggling to pay his mortgage, to put some food on the table, and to try to put a few bucks away to help his kids go to college. A hundred bucks is a lot of money in these economic times. So talk of government debt in the trillions of dollars is enough to make our beer go flat.
I have developed a simple way to relate to the way the national government spends our money. I call it Federal Spending for Dummies. I simply take the total dollars the federal government spends (official White House numbers) and divide it by the population (according to the U.S. Census Bureau). I compare the amount the government spends per person by decade and adjust for inflation.
I did something similar two weeks ago looking at state spending. Here are the raw, unadjusted numbers:
In 1980, the Federal Government spent an average of $2498 per citizen.
In 1990, the Federal Government spent an average of $4943 per citizen.
In 2000, the Federal Government spent an average of $6138 per citizen.
In 2010, the Federal Government will spend an average of $11,640 per citizen (estimated).
If we adjust for inflation using 1980 dollars, Federal spending has climbed from $2498 per person in 1980 to $4470 today. In the last decade alone, spending has climbed $1533 per citizen in inflation-adjusted 1980 dollars.
Democrats and Republicans have collaborated in this dramatic expansion of government spending. In fact, the most frugal period was the decade of gridlock when President Clinton, a Democrat, and Speaker Gingrich, a Republican, helped keep the other party’s spending habits in check.
And yet, even with the modest restraint of the 90’s, federal spending has increased more than twice the rate of inflation since 1992.
We have a spending problem, not a tax problem.
The national debt is near $12 trillion, about 61 percent of gross domestic product (GDP). By contrast, China’s national debt is only 16.2 percent of their GDP.
The Government Accountability Office (GAO), the auditor for the federal government lays it on the line to us: the U.S. is on a fiscally “unsustainable path.
Has spending skyrocketed because of the war on terror? No. As a percentage of GDP we spend less today on defense than we did during the Reagan years.
On the other hand, pork barrel spending is out of control. According to Citizens Against Government Waste, earmarks have increased from 13, 443 from 1991 through 1999 to over 20,000 in the past two years alone.
The risks of excessive government spending deficits are significant. Either taxes have to be raised so dramatically, that the economy is crippled and jobs destroyed. Or else government spending has to be yanked back abruptly with whiplash repercussions to the country. Or else we have to inflate our way out of the mess, which creates an even worse problem.
As I write this piece, a Republican was just elected to the Senate from the liberal state of Massachusetts. Ted Kennedy’s Senate seat is now in the hands of a Republican.
Is this a ringing endorsement for the Republican Party?
I think not. Rather, it is a ringing endorsement for restraint. It is an indictment of proposed health care legislation. It is a reflection of the electorate’s desire for moderation in government spending.
It’s not too late to change our course. But we need to start now.