Where Has the Spending Gone, Joe Dimaggio?
by Mike Kimel
Where Has the Spending Gone, Joe Dimaggio?
Lately there’s been a gnashing of the teeth about the deficit and the debt and what to do about it. Democrats point out that when GW took office, there was no deficit, and that a big part of the problem is that federal tax revenues have fallen from 20.6% of GDP in Fiscal Year 2000 to 14.9% in Fiscal Year 2010 (warning – Excel file), and are slated to fall to 14.4% this fiscal year. I found a nice graph here. Despite the nonsense that gets referred to as Hauser’s Law, the big fall in tax revenues is is in large part due to the tax cuts, although the poor economy also plays its share.
(Note – so I don’t have to keep typing it, all years in this post are fiscal years.)
But for there to be a deficit, tax revenues (whether high or low) have to be less than spending. And spending has also gone up (again see OMB Table 1.2 referenced above) from 18.2% of GDP in 2000 to 23.8% of GDP in 2010, and is slated to go above 25% of GDP this fiscal year. (It is worth noting – federal spending as a percentage of GDP fell in every single year during the Clinton administration… which means Newt Gingrich doesn’t get credit for it unless you believe he had one heck of a time machine.)
I thought it would be interesting to see where that spending is going, so I pulled the data from OMB Table 3.1 and graphed it below. (Dotted lines indicate future projected spending.)
The figure indicates that for the most part, spending in most categories has been pretty flat. Defense spending, though, rose from 3% of GDP in 2000 to 4.3% in 2008, 4.8% in 2010, and is slated to go above 5% this year. Afghanistan, Iraq, and now Libya all cost money, especially if conducted with sweetheart no-bid deals. The bigger ticket category that saw increases was “human resources” – that was 11.4% of GDP in 2000, reached 13.2% of GDP in 2008, and is expected to top 16% this year.
So what are these human resources? I don’t have the definition in front of me, but I think that includes things like unemployment compensation, food stamps, and the like. Put another way, some of the spending (it’s 3:36 AM right now – I think the “how much” part of “some” has to wait for another post) is happening because the tax cuts didn’t work as advertised. But then, its not like that should have been a surprise.
Cross-posted at the Presimetrics blog.
Mike said: “(It is worth noting – federal spending as a percentage of GDP fell in every single year during the Clinton administration… which means Newt Gingrich doesn’t get credit for it unless you believe he had one heck of a time machine.)”
Fascinating how federal spending has declined for the past several decades when we are not in a recession or fighting a war(s). It was ofcourse all of Clinton’s superior policies that made the difference, 😉 Especially during those years he rode the way-back/future machine implementing his superior policies.
CoRev,
So was it a war or a recession that ran from 1983 to to 1986, because in each of those years, the deficit was higher than it was during the 1981-1982 recession. And there were small deficits each year in the 1960s (no recession, and the VietNam war wasn’t really an issue until at least midway through the decade), but which seemed to generate just enough growth that they paid for themselves (the debt / GDP shrank during the JFK and LBJ administrations).
But, you do have a point – deficits do seem to remain for a few years after some recessions (1930s under FDR, post 1982, and the present time). So does that mean that you think these big deficits under Obama are just “natural” and he should get a pass for them? Somehow I would imagine you’d give a pass to Reagan but not to Obamaor FDR for the same pattern.
Mike,
Reagan used voodoo economics and inflating the war industry bubble without increasing revenues.
We “worried” the Soviets mired in Afghanistan, fear and lies for war profits, but I was there in my small part spending on arms so fast we did not get much, for example B-2.
Prior to Reagan DoD buying was a mess, it just got bigger and easier to contract for junk, the aim to flush big money into the already ineffective war economy.
Mike, actually, yes, I do believe the recessions are mostly natural, with the exception of Reagan’s planned to get us out of the other horrible economic conditions. We seem to stagger from one bubble to the next, until that collapses.
OTH, I also believe that some policies shorten and or alleviate the depth of recessions as well as some policies are used to alleviate the impacts on the populace. In that, Obama has produced miserable results.
Recession recoveries are the result of business activity, not governments’, and that is where the firlst problem lies. Secondly, when you issue policies to stimulate business growth at the same time jaw boning them for causing the original problems and proposing legislation to regulate/punish them, makes for a less than friendly business environment. Accordingly we see the results with an extended recession and slow and shallow recovery.
President’s can be measured on their problem solving performance, and in this respect a case could be made that Republicans are superior to Democrats. Carter and Obama are cases in point. It took a Republican to solve Carter’s economy, and it appears that a Republican will probably be needed to solve Obama’s.
Mike, actually, yes, I do believe the recessions are mostly natural, with the exception of Reagan’s planned to get us out of the other horrible economic conditions. We seem to stagger from one bubble to the next, until that collapses.
OTH, I also believe that some policies shorten and or alleviate the depth of recessions as well as some policies are used to alleviate the impacts on the populace. In that, Obama has produced miserable results.
Recession recoveries are the result of business activity, not governments’, and that is where the first problem lies. Secondly, when you issue policies to stimulate business growth at the same time jaw boning them for causing the original problems and proposing legislation to regulate/punish them, makes for a less than friendly business environment. Accordingly we see the results with an extended recession and slow and shallow recovery.
President’s can be measured on their problem solving performance, and in this respect a case could be made that Republicans are superior to Democrats. Carter and Obama are cases in point. It took a Republican to solve Carter’s economy, and it appears that a Republican will probably be needed to solve Obama’s.
CoRev,
I tend to agree with you that there is a lot the President can do, and this one handled things poorly. Remember this post: http://www.presimetrics.com/blog/?p=3
But this recession has been worse than normal, so he should have gone straight to what worked during other bad recessions: http://www.angrybearblog.com/2010/04/1920s-depression-glenn-beck-thomas.html
“(It is worth noting – federal spending as a percentage of GDP fell in every single year during the Clinton administration… which means Newt Gingrich doesn’t get credit for it unless you believe he had one heck of a time machine.)”
Newt Gingrich should be a term memorialized in our vocabulary. For instance, what a Newt Gingrich you are (mensch, dip shit, bottom feeder, charlatan, loser, etc.) Just like GWB, Paul Ryan, etc.
The growth in spending on the military and the Republican sponsorsed health monopoly, have accounted for all the growth in spending during the last 30 years. Of course tje rise in spending during the O’Bama years is as a result of the CoRev alternate reality.
No matter how many times Dean Baker exolains to the ignorati (CoRev), they still return to the Koch message. There was a time in the US when the people saw Franklin Koch (John Birch Society) for what the are. Oligachs.
“I tend to agree with you that there is a lot the President can do, and this one handled things poorly” Mike Kimel
Sorry for the “Mozilla 3X posting”
The President “obviously (snark)” handled the real problem: the disenfranchisement of the ignorant Southern “Dixie” Democrats. The 1964 Civil Rights act under LBJ was the final straw, causing them to stop hating Abe Lincoln and hate LBJ. David Duke for GWB, remember.
Now the dumb shit “confederates” are biting the hand that fed them. The FDR sponsored TVA project, and the health care research, saved these ridge runners. Now they want to determine what the “best” thing for America is ?
Well
if i followed the CoRev logic
recessions occur naturally therfore there is nothing we ought to do to help ordinary people live through them… if the lazy bastards are forced to find jobs, the recession will be over.
as for the logic of blaming deregulation of the banks equals blaming “business,” well, even i can’t follow that one.
I thought Paul Volcker “solved Carter’s economy”. And he was appointed by Carter.
Batmensch,
I didn’t even bother to respond to that piece. I’ve noted to him before, the inflation and everything else he attributes to Carter seems to have started in 1973. And we know Obama’s economy started in Dec 2007.
Mike and Batmensch, so, who mentioned Carter? You!
Volcker and Reagan? Yup! Getting kinda desperate to disprove Dem policies are worse than … well you know.
CoRev, how did anyone but you bring up Carter when he’s first mentioned in your 2nd comment above?
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