Saturday, December 12, 2009

Government Spending Is Out of Control

A significant risk to economic growth in the U.S. is the record amount of debt being taken on by the U.S. government. The brief video below explains the spending in this crisis compared to past crises.

Since this crisis began in late 2008, the government has spent $4 trillion supporting various new programs. The government has committed to spend an additional $7.8 trillion over the next several years which will bring the total new spending amount to $12 trillion. As year-end approaches, Congress wants to increase the U.S. debt limit by nearly $2 trillion. The spending coming out of Washington does need to stop.

How does this spending compare to spending in past crises?
  • Marshall Plan-$115 billion
  • New Deal-$500 billion
  • TARP-$700 billion
  • Stimulus Plan-$787 billion
  • World War II-$3.6 trillion

Some of this spending is finding its way into the hands of government employees. USA Today reports the average pay for federal workers is now $71,206 versus $40,331 in the private sector.

As Margaret Thatcher once said, "the problem with socialism is that you eventually run out of other people's money." I think we could be on a slippery slope to that outcome if the government does not reign in its current rate of spending growth.

1 comment :

Anonymous said...

i would be very interested to see in which percentile the growth had come.

the management of this crisis has encouraged the trend toward celebrity and "brightest and best" thinking.

now lets imagine what regulatory frankensteins these technocrats will devise