Economy lost 400,000 jobs or gained 100,000
- Thread starter mike oxbig
- Start date
our beast is small? its the largest beast in the world, in history... especially when you factor in state and local govt.
Last year Fed spending alone was 25 % of the largest economy in the world... and that was with artificially low interest rates.
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here is a comment from...
http://www.ritholtz.com/blog/2011/07/government-spending-as-a-percentage-of-gdp-2/
As can be seen from the chart, until 1913 federal spending averaged about 3% of GDP. During a lifetime, the average 19th century U.S. citizen had no direct contact with the government in Washington. Thatâs what life in an actual federal republic is like.
Three baleful changes in 1913 killed the federal system: (1) income tax; (2) Federal Reserve Act; (3) direct election of Senators. As a result, the states lost their Senate veto, while the central (no longer federal except in name) government acquired the taxation and credit creation power to metastasize into the helpless but lethal monster that menaces our safety and prosperity today.
Any central government that plunders more than 10% of GDP is inherently tyrannical.
another comment to that article...
its spending not the bush tax cuts...
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Finally, some applicable info. Consider the difference between now and 2000, the last of the Clinton/Gingrich years.
2000 (%GDP): Taxes 20%, Spending 18%
2011 (%GDP): Taxes 15%, Spending 25%
Keeping in mind that the 5% GDP gap in revenues is MOSTLY due being at opposite extremes of the cycle (in 2007 taxes were 18.5% of GDP), the more pressing problem is the MOST of the 7% increase in spending is structural.
So have could we fix this 10% GDP fiscal deficit relative to the end of Clintonâs presidency?
Eliminate Bushâs tax cuts âfor the richâ (1/5 of the Bush tax cuts): 0.5% of GDP
Eliminate Bushâs tax cuts for the not ârichâ (4/5 of tax cuts): 1.5% of GDP
Return to peak of revenue cycle: 3.5% of GDP
Reduce spending to 2000 levels: 7% of GDP
Thatâs why of this conventional wisdom bs and propaganda from the NYT and itâs lefty blog cheerleaders comes so completely short of fixing the fiscal gap.
We have to decide as a country if weâre going to have year 2000 levels of spending (18%) or if weâre going to have 2011 levels of spending (25%) going forward. If itâs the latter, ending all of the wars, letting tax cuts expire for the rich and the middle class and wonât even come close to closing the fiscal gap.
its spending not the bush tax cuts...
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Finally, some applicable info. Consider the difference between now and 2000, the last of the Clinton/Gingrich years.
2000 (%GDP): Taxes 20%, Spending 18%
2011 (%GDP): Taxes 15%, Spending 25%
Keeping in mind that the 5% GDP gap in revenues is MOSTLY due being at opposite extremes of the cycle (in 2007 taxes were 18.5% of GDP), the more pressing problem is the MOST of the 7% increase in spending is structural.
So have could we fix this 10% GDP fiscal deficit relative to the end of Clintonâs presidency?
Eliminate Bushâs tax cuts âfor the richâ (1/5 of the Bush tax cuts): 0.5% of GDP
Eliminate Bushâs tax cuts for the not ârichâ (4/5 of tax cuts): 1.5% of GDP
Return to peak of revenue cycle: 3.5% of GDP
Reduce spending to 2000 levels: 7% of GDP
Thatâs why of this conventional wisdom bs and propaganda from the NYT and itâs lefty blog cheerleaders comes so completely short of fixing the fiscal gap.
We have to decide as a country if weâre going to have year 2000 levels of spending (18%) or if weâre going to have 2011 levels of spending (25%) going forward. If itâs the latter, ending all of the wars, letting tax cuts expire for the rich and the middle class and wonât even come close to closing the fiscal gap.
http://www.realclearmarkets.com/art...nt_spending_and_the_18_of_gdp_myth_99063.html
The truth here is that the U.S. has thrived with far less government spending. Indeed, a look at times when we as a nation were imperiled offers a far different story than what you have been told.
Research shows that from the founding of our nation, 1787-1849 (63 years) federal spending averaged 1.7% of GDP. For the next 51 years, 1850-1900 (including fighting the Civil War) spending averaged only 3.1%. From 1901 till 1930 (including fighting WWI) it never reached 8%, and averaged approximately 3.2%.
At the height of the progressive movement (including FDR's New Deal) federal spending as a percentage of GDP never went above the 1934 level of 10.7%. Even after the historic 1944 (WWII) level of 43.6%, spending had fallen by 1948 to 11.6% of GDP.
In short, for the first 130 years of the U.S.'s 224 year existence, federal spending as a percentage of GDP averaged around 2.5%!
So why is the 18-25% solution offered? At best politicians might be misusing or misrepresenting data, or using only a couple of decades for determining what's "historical" and "average" spending. In all honestly, heuristic ignorance and the need for political capital is probably driving the rhetoric. What's important is to realize the "parroting" we are hearing should be our canary in the mineshaft, warning us of the impending decline of our economy caused by excessive federal spending.
Why should we care? Because government spending is taken directly out of your pocket, or out of the economy. Spending is today's burden becaue every dollar consumed by our profligate government is one less that could fund productive advancement in the private economy.
Every dime needlessly spent by government comes at the cost of efficiency in moving scarce resources to their most valuable use. As Milton Friedman said, "nobody spends somebody else's money as carefully as he spends his own. Nobody uses somebody else's resources as carefully as he uses his own." So any policy that reduces personal freedom in economic decision making inhibits economic growth which forces people to suffer needlessly.
The truth here is that the U.S. has thrived with far less government spending. Indeed, a look at times when we as a nation were imperiled offers a far different story than what you have been told.
Research shows that from the founding of our nation, 1787-1849 (63 years) federal spending averaged 1.7% of GDP. For the next 51 years, 1850-1900 (including fighting the Civil War) spending averaged only 3.1%. From 1901 till 1930 (including fighting WWI) it never reached 8%, and averaged approximately 3.2%.
At the height of the progressive movement (including FDR's New Deal) federal spending as a percentage of GDP never went above the 1934 level of 10.7%. Even after the historic 1944 (WWII) level of 43.6%, spending had fallen by 1948 to 11.6% of GDP.
In short, for the first 130 years of the U.S.'s 224 year existence, federal spending as a percentage of GDP averaged around 2.5%!
So why is the 18-25% solution offered? At best politicians might be misusing or misrepresenting data, or using only a couple of decades for determining what's "historical" and "average" spending. In all honestly, heuristic ignorance and the need for political capital is probably driving the rhetoric. What's important is to realize the "parroting" we are hearing should be our canary in the mineshaft, warning us of the impending decline of our economy caused by excessive federal spending.
Why should we care? Because government spending is taken directly out of your pocket, or out of the economy. Spending is today's burden becaue every dollar consumed by our profligate government is one less that could fund productive advancement in the private economy.
Every dime needlessly spent by government comes at the cost of efficiency in moving scarce resources to their most valuable use. As Milton Friedman said, "nobody spends somebody else's money as carefully as he spends his own. Nobody uses somebody else's resources as carefully as he uses his own." So any policy that reduces personal freedom in economic decision making inhibits economic growth which forces people to suffer needlessly.
Sounds like you are quite well versed in this.
