It’s the Growth, Not the Deficit
By Rob Hartwell • Mar 31st, 2009 • Category: Economic DevelopmentIn 1944, during the peak of our involvement in World War II, our federal government took in $43.7 billion and spent $93.1 billion creating a deficit of over $48 billion, larger than our entire budget receipts. By comparison, President Obama’s FY 2010 budget estimates receipts of $2.38 trillion and outlays of $3.62 trillion, so while we are racking up a record deficit of over $1.3 trillion, we have experienced crisis before and come out of it, and will do so again this time. It is the scale and growth of government overall that we must be concerned with.
A look at receipts and outlays in each decade since World War II shows a startling increase in the size of government that we somehow must learn to control. The growth in overall government spending grew by 74.2 percent from 1950 to 1960; by 92.2 percent from 1960 to 1970; by 168 percent from 1970 to 1980; by 100 percent from 1980 to 1990; by 96.2 percent during the 1990s and since 2000 it is projected to grow by 133 percent.[1]
The true measure of this spending growth must be judged compared to population growth. A chart comparing these factors follows. Population is measured in thousands. While population has grown steadily albeit slowly, spending has skyrocketed out of control. [2]
The more the federal government spends, the more state and local governments grow, and the overall tax burden on our population, requiring two or three family members to work to stay ahead, continues to increase. Where and when will this come to a head? It likely already has, but stay tuned for more. Another federal stimulus package is likely!
[1] All estimates taken from the Economic Report of the President and the FY 2010 Budget
[2] Population figures taken from the U.S. Department of Commerce Census Bureau
Rob Hartwell is President of Hartwell Capitol Consulting LLC, a public affairs firm, Senior Consultant to American Systems International Corporation and former Chief of Staff for two U.S. Congressmen. He has long been active in government and community affairs.
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Another chart worthwhile to examine is the growth in the state-employer workforce. EVen with the past emphasis on privitaization (i.e. undertaking govt. activities without counting the number of perosns employed thereby), the increasing size of the number of State employees far outstrips other growth peasurements, I think. And there has been salary creep, too, although that’s much more difficult to measure in any fair way (presumably higher-priced talent generates greater productivity among State employed workers). The statistics, also, should reflect state and local employees, and then separate school from non-school local (and state?) employees. Of the total state and local government-hired employees, how many are unionized through the NEA and/or other teachers’ union(s)? Another topic: While I have your ear, has anyone recently taken a second (or third) look at the many recommendations of the various prior cost0-cutting commission reccomendations? There were several, in years past, like the Wilder Commission. My sense is that quite a few suggestions have borne fruit (especially the low-hanging ones!) but that much more could have bene done. Has anyone done a report card on the previous commissions?
During World War II, deficit spending was an existensial necessity. Deficit spending to bailout auto companies, subsidize loans to those who could not afford to pay them back, provide government-run health care and as a response to climate change somehow does not strike me as being in the same category as stopping Nazi Germany and Imperial Japan from taking over the world.
Our “stimulus” spending is so nonsensical that the experienced socialists in Europe will not even go along. As the German Chancellor and Finance Minister have pointed out, the Germans have had some experience with “stimulus” spending. It does not stimulate much except inflation.
This link goes to an excellent story about the German Chancellor’s tough stand on spending our way to prosperity: http://www.realclearworld.com/articles/2009/04/angela_merkel_voice_of_reason.html
That’s an interesting article. I just wondered if you could tell me where to find more info on this topic ?