I submit this link a bit reluctantly. The author is a Swede of Kurdish descent andit’s a post on U. S. non-defense federal spending as a percentage of GDP with an alarming graphic. The howls of anguish in the comments are astonishing. Go on over and read the whole thing (hat tip: Greg Mankiw). The author notes:
In the latest projection by the Congressional Budget Office, the ten year deficit is estimated at 13 trillion dollars. By contrast, Obama’s various tax increases on the rich will only bring in 1 trillion in the same period.
The 13 trillion dollar deficit which the President helped create and long terms entitlement deficits are the main reason why S&P downgraded U.S debt, not the 1 trillion in tax increases which Republicans prevented.
As a response to the economic crises and based on ideological conviction, President Obama decided to expand federal non-defense spending more than any President in recent history. This unprecedented expansion of government can perhaps be justified by orthodox Keynesianism.
I am not particularly alarmed by the sharp rise in spending. That was to be expected for the reasons stated.
What concerns me is that the increase is maintained indefinitely into the future. That can’t be justified under Keynesian theory and, frankly, it can’t be justified economically.
I think that this is a very big danger area for the president and it’s likely to be one of the Republicans’ primary lines of attack.
I don’t blame President Obama alone for the mess that we’re in. I think that we’re reaching the end of a process that goes back far before him or his predecessor for the last forty or even the last sixty years. The liabilities that we’ve incurred that are starting to come due as the Baby Boomers retire are hardly a surprise and the time to address them was 15 or 20 years ago when it looked like the good times would last forever.
I agree we’ve known for a long time that the Boomers were retiring, that they would spend less, buy fewer homes, pay less in taxes while receiving more in benefits.
There is I think a case to be made that this is a sort of generational rape. We, the Baby Boomers, used our numbers to get what we wanted — benefits, wars and low taxes — and have shifted the cost onto the next several generations. They can now expect to live out their lives hobbled by the need to pay for us.
I gave a speech on this exact topic to a room full of high school honors students who were accompanied (no one had warned me) by the middle-aged/elderly school board. Not a huge hit with the grown-ups in the room. Especially the part about how we pile work and responsibility for credentialing onto the shoulders of high school kids because we need them to grow up fast and start paying our bills. And the rhetorical question, “Why would any of you listen to me or my generation? We’ve had our hands in your pockets robbing you since the day you were born.”
Kind of doubt they’ll invite me back.
The flip side of that is that by the time I’m ready to hang up my spurs I’ll have paid into Social Security, much of it at max, and Medicare for well over half a century without any real prospects of getting back what I put in let alone the opportunity cost, etc. I’ll also have paid hundreds of thousands of dollars for public school education that only helps me in an oblique, social contract sort of way.
I think we are now entering an era in which we’ll be forced to do something we haven’t generally done: choose. It won’t be “all of the above” anymore and we should have started doing something about it a couple of decades ago.
Just think though: if you develop Alzheimers you can get it all back and then some. How’s that for incentive?
Saw the chart. First, it was a good example of misleading by not going back to zero and exaggerating the effect. I hope that was part of your hockey stick reference. Next, all of the CBO projections do not show non-defense discretionary spending as being a significant part of our long term debt problem.
Steve
Steve,
The chart is for non-defense spending, not non-defense discretionary spending. So I’m not sure what is so controversial about this chart – in essence it’s saying basically the same thing the CBO has been saying for quite some time. Look at the first chart on that CBO page – for 2021 once you take out defense, they project spending to be 20.2% of GDP which is what Tino’s chart is saying.
The numbers are all consistent, what’s wrong is how the author pins all the blame for this on Obama.
Dave,
No doubt you’ve paid out a lot of money that didn’t directly benefit you and in any system of taxation there is going to be some of that to maintain any kind of social contract, as you indicated. It seems to me, though, that’s quite a bit different than the tens of trillions that are going to be transferred from one generation to another – an amount of money which threatens to wreck the the economy of the whole nation not to mention fundamentally alter, in a negative way, the existing social social contract.
If the last couple of generations of my family are any gauge, I will be cursed with substantial mental clarity until I eventually give up and decide to die.
I plan on following my mother’s example and, at the end, refuse anything but palliative care. She was taking, essentially, no medications until she died at age 89 and lived on her own until she went into her final decline which lasted only a week without a great deal in the way of medical care. She didn’t pay a great deal into the Medicare system but even at that I seriously doubt that she received as much in benefits as she paid in.
Santé. Blog long and prosper.
I’ve had a longstanding – sometimes acrimonious – debate with someone not to be named (Bernard Finel) about the rotation from defense spending to the juggernaut called “social spending.” Defense spending can still be cut, but the “robustness” of its effect is waning. Time to deal with social spending, or else. And so say Mr. S and Mr. P.
“I think that we’re reaching the end of a process that goes back far before him or his predecessor for the last forty or even the last sixty years.”
Absolutely, but my problem is that Obama is the “process” on steroids. Instead of hitting the brake, he hit the accelerator, and is now bleeding the oil (the moneymakers) in the engine out of spite.
Bizarre is the only apt description.