How do you blow through $2.8 trillion…in a year? Beats me I couldn’t do it if I tried, but the U.S. government can do it, no problem. However, what is interesting is exactly what happened with spending over the past 16 years.
In looking at that graph I’d say that there was a change in the rate of spending after 2000. Further, the Cato report notes that there are five basic ways for the government to spend money.
- Pay workers.
- Buy goods and services.
- Transfer wealth to preferred interest groups.
- Subsidizing state and local spending.
- Pay interest on the debt.
Any government program will likely fall into one or more of the above catagories. For example, the Section 8 housing subsidy program would fall into pay workers (i.e. paying the government workers administering to the program) as well as transfer wealth to a preferred interest group.
If you look at the growth rates in these programs from the 1990’s and after 2000 you see dramatic differences in growth rates across all five catagories. Granted some of this increase in spending is due to increased defense spending in relation to 9/11, and the wars in Afghanistan and Iraq. Still the growth rate of things like (non-Social Security) transfers of wealth from one interest group to another went from 6% during the 1990s to 8.6% after 2000. And looking at non-defense spending on purchase of goods and services growth went from 3.9% in the 1990’s to 8.4% after 2000. The bottom line is that spending went from a growth rate of 3.8% during the 1990s to 6.7% after 2000.
The bottom line is that since 2000 there has been little to no restraint on spending. Holding spending down at the average during the 1990s for nondefense spending listed in the linked Cato report would cut the current deficit by another $140 billion dollars. The federal government is bloated on pork and if anything it has gotten worse in the last several years. Perhaps the best thing that could happen in regards to controlling spending if is the Republicans indeed lose one or both houses of Congress. I know some will then point out that the Democrats might force the President to withdraw troops from Iraq and that this could be disasterous. While there maybe some truth to this, my response would be, “Perhaps the Republicans should have thought of that before throwing out the ‘fiscal responsibility’ plank of their platform.”
