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Posts tagged spending
8:25 am - Fri, Apr 11, 2014
3 notes
Federal taxes are due in a few days, but Americans will be working a few days after that to earn enough money to pay their tax bill for the year.
As the chart above shows, taxes cost Americans more than food, shelter and clothing — combined.

Federal taxes are due in a few days, but Americans will be working a few days after that to earn enough money to pay their tax bill for the year.

As the chart above shows, taxes cost Americans more than food, shelter and clothing — combined.

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1:53 pm - Fri, Apr 4, 2014
157 notes
Just sayin’.

Just sayin’.

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4:40 pm - Mon, Mar 3, 2014
1 note

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12:10 pm - Wed, Feb 26, 2014
4 notes

Our Long National Austerity Nightmare Is Over

“With the 2015 budget request,” The Washington Post reported last week, “Obama will call for an end to the era of austerity that has dogged much of his presidency.”

Well, it’s about time! The end of austerity cannot come soon enough, as far as your humble correspondent is concerned. And a quick look at the historical budget tables shows why: In 2008, the federal government spent just a hair under $3 trillion. After six years of President Slash-and-Burn, spending has shrunk to almost $4 trillion. If we keep cutting like this, it will be down to $5 trillion before you know it.

These savage reductions have taken place in nearly every major federal program. Take defense spending: The year before Obama took office, it stood at $594 billion. It’s now $597 billion. Back in 2001 it was almost $300 billion. Even if you adjust for inflation, it’s clear that defense spending has shrunk at an alarming rate.

Same deal for food stamps: Under President Barack Obama, spending on the Supplemental Nutrition Assistance Program has gone from $40 billion to $78 billion, in constant dollars. And that’s after it went from $20 billion to $40 billion under Obama’s predecessor, George W. Bush. Spending cuts like that are simply barbaric.

But they are par for the course. Using inflation-adjusted, 2012 dollars, federal spending on K-12 and vocational education has gone from $41 billion in 2002 to $100 billion in 2012. During the same period, Medicare spending has gone from $293 billion to roughly $500 billion. Transportation spending? It went from $86 billion to $138 billion. Medicaid and related programs? $223 billion to $327 billion. Energy? Half a billion to $9 billion.

If we keep hacking away at federal spending like this, pretty soon we won’t have any federal government left! No wonder the economy has been so sluggish: We obviously need more stimulus.

Clearly, trends like these cannot go on. You can’t cut your way to prosperity; America needs to be building up, not tearing down. We need more investment in basic research — research like an important new project being funded by the Fish and Wildlife Service, which is giving $175,000 to a grant recipient who will use the money to study “the Swimming Abilities of Native Stream Fishes in the Northern Rockies-Upper Great Plains Regions of Montana.”

Studying the swimming abilities of fish is precisely the sort of research the federal government is best at. But if we don’t wise up and start spending money faster, we might have to do without it. Then where will we be?

It’s not just America. There has been a lot of austerity in Europe, too. Just ask Paul Krugman, the great economist who writes for The New York Times. “You see,” he patiently explained last week, “some but not all members of the euro area … were forced into imposing Draconian fiscal austerity” during the recent economic downturn — the results of which were “nasty, in some cases catastrophic, declines in output and unemployment.” (Krugman has been explaining this patiently for some time. In his 2012 piece on “Europe’s Austerity Madness,” he pointed out that “with erstwhile middle-class workers reduced to picking through garbage in search of food, austerity has already gone too far.”)

Just how bad has the European austerity been? According to a piece in the Financial Post last May, in 2007 government spending consumed 45.6 percent of the GDP of countries in the European Union. By 2012, that percentage had shrunk to a shockingly low 49.4 percent. No wonder the economy over there stinks.

Clearly, we cannot allow any more of those darn foreigners to enter America and bring any of that austerity nonsense with them. Unfortunately, we are going in the wrong direction on border control, too. A decade ago, we had almost 10,000 border-patrol agents. Now we have more than 21,000. Border fencing, meanwhile, has increased 370 percent. Deportations are at an all-time high. It’s like we don’t even care about sealing the border any more.

One more data point should clinch the case: In January 2013, The Washington Post reported that “Congress funded Customs and Border Protection at $11.7 billion — 64 percent more than FY 2006 and $262 million more than in FY 2011, despite the new climate of austerity.”

Yes, the new climate of austerity. Thank heavens we’re putting an end to that.

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1:05 pm - Thu, Feb 6, 2014
Chart of the Day: federal spending, adjusted for inflation. (via)

Chart of the Day: federal spending, adjusted for inflation. (via)

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1:19 pm - Fri, Jan 10, 2014

But boy, this “austerity” thing is just going to kill us, isn’t it?

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10:00 am - Wed, Oct 23, 2013
Chart of the Day.

Chart of the Day.

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9:00 am - Wed, Sep 25, 2013
2 notes

GOP Plants Its Flag on the Wrong Hill

To grasp just how big a belly-flop the congressional Defund-Obamacare Caucus has taken into the lake of lunacy, consider this: Karl Rove thinks they are being unrealistic.

Karl Rove.

Rove is the man who — you might recall — was arguing, late into Election Night, that Mitt Romney had the presidency in the bag. Rumor has it Rove still sneaks down into his basement now and then to re-check the numbers.

But on the folly of tea party efforts to defund Obamacare, Rove has not the slightest doubt. As he noted recently, in order to prevail the defunders first would have to convince some Democrat or Democrats in the Senate majority to join their quixotic quest. That won’t happen. Supposing for argument’s sake that it did, the president would simply veto the measure. Overturning the veto would require turning many more Democrats: 54 in the House and 21 in the Senate. “No sentient being,” Rove says, “believes that will happen.”

And yet the defunders press on — even after Sen. Ted Cruz admitted the votes weren’t there, even after defunding’s principal cheerleader, Heritage Foundation president Jim DeMint, all but admitted it is just a P.R. stunt. Last week the defunders staged something close to a palace coup when they steamrollered House Speaker John Boehner and House Majority Leader Rep. Eric Cantor of Virginia, who had been trying to talk some tactical sense into them. The House leadership had proposed a plan that would have required the Senate to vote on defunding Obamacare yet still allow it to pass a spending measure. Outraged, the defunders started sharpening their pitchforks and lighting their torches. Boehner backed down.

With the federal bank account empty, this sets the stage for a government shutdown — and not just a halfhearted, kinda-sorta shutdown like the one that took place in 1995, when a number of appropriations measures already had passed. The shutdown looming now would bring just about all federal activity to a full stop. Everyone knows how the story would then play out: Public fury would rain down upon the GOP like an acid monsoon, and flayed Republicans would quickly accede to the president’s demands. Just like they did the last time.

This doesn’t mean Democrats have virtue and honor on their side — just the votes. As Oscar Wilde said, “It would take a heart of stone not to laugh out loud” at Senate Majority Leader Harry Reid’s complaint that “bipartisanship is a thing of the past.” Reid would not recognize bipartisanship if it wore a blinking neon sign. Democratic intransigence is central to this showdown, too. You can’t have a stalemate if one side is willing to give. And as The New York Times has noted, “The health law is not negotiable for President Obama and the Democrats.”

The president also insists he will not negotiate on raising the debt ceiling — another fiscal debate that will follow the appropriations fight in short order. Obama’s defenders insist congressional conservatives have taken the debt ceiling hostage, and with it the country’s credit rating and fragile economic recovery. They implore Obama to stand firm. But if the hostage analogy is right, then their advice is wrong — at least according to every Hollywood climax since the invention of film.

You know the scene: The hero is about to prevail when the wicked villain sticks a gun in the ear of an innocent child. “Drop your weapon,” the villain snarls, “or I blow her head off!” With blazing eyes the hero slowly lowers his gun to the ground and shoves it away with his foot.

That’s how the scene is supposed to play, anyhow. In this instance, though, the presumptive hero — Obama — doesn’t stand down. Instead, he’s willing to let conservatives shoot the innocent bystander in the head, just so he can shoot them in the foot. Not very noble.

All analogies are inexact, and this one breaks down partly because Republicans are actually asking not for something wicked but for something good: spending reductions. Last week the Congressional Budget Office reported (as if it needed further reporting) that the nation’s long-term fiscal trajectory is unsustainable. Without real and deep cuts to entitlements that should have started a couple decades ago, the national debt will ruin the country.

That’s the hill upon which Republicans should plant their flag. Obamacare might be execrable, but it also is untouchable so long as we have a president named Obama. Moreover, compared to the three gargantuan entitlements its outlays are almost trivial. Obamacare will cost $1.8 trillion over 10 years — no small sum. But by 2023 Medicare alone will cost $1 trillion every year. Adding Medicaid and Social Security will bring the annual tab to $3 trillion. Add interest on the debt, and by 2025 those programs will consume every last federal dollar.

On defunding Obamacare, conservative Republicans are trying to deny mathematical reality. But on the far graver question of the national debt, the whole country is.

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5:38 pm - Sun, Sep 22, 2013
10 notes

Federal Spending and Debt, from the Founding to the Future:

"Before the current spike, federal debt never rose above 48 percent of GDP during peacetime. Right now debt is 73 percent of GDP and CBO projects that it will rise to 129 percent by 2050 without reforms."

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5:55 pm - Sun, Aug 11, 2013
23 notes

The Right Is Wrong About Defense

And here’s why:

First, look at the big picture. From 2002 to 2011, inflation-adjusted defense spending rose 64 percent. In 2012, defense spending shrank 6 percent. Sequestration hacks real Pentagon spending levels all the way back to where they stood in … 2007. Was the U.S. military woefully undermanned and underarmed in 2007? Of course not.

If you include homeland security, intelligence and foreign aid, then national-security spending totals more than $840 billion. All individual income taxes total $1.1 trillion, just $260 billion more than that. True, defense spending has shrunk as a share of the overall budget — thanks to exploding outlays in social-welfare spending. The remedy for that is to cut the latter, not pointlessly inflate military spending just so it can keep up.

And speaking of catching up: At present, the U.S. accounts for 46 cents of every military dollar spent worldwide. America’s military allies add another 22 cents. That means the rest of the nonaligned world spends only 32 percent of global outlays on arms, and America’s potential enemies — such as China, Iran and Russia — spend only about half of that. They have a long way to go even to get within spitting distance of parity.

What’s more, the U.S. is winding down the second of two wars. Reducing troop strength from a wartime high of more than half a million Army regulars to slightly less than half a million five years from now hardly qualifies as hollowing out the service. Yet many conservatives seem to think any reduction in troop strength is a disaster. That’s like insisting food-stamp levels should remain steady even after the end of a recession.

Second, a grotesque amount of Pentagon spending goes to waste — as even conservatives will concede. According to the American Enterprise Institute, “most major weapons system development programs … have cost overruns of over 30 percent.” The Heritage Foundation has identified $70 billion in annual savings. That’s 40 percent more than the cuts imposed by sequestration. So contrary to what Hagel claims, deep spending cuts need not require the mothballing of carrier strike groups. They simply require doing the job right.

A 2011 report by the Government Accountability Office found that in just two years “management failures added at least $70 billion to the projected costs” of major weapons systems, The New York Times has reported. A single program — the F-35 Joint Strike Fighter — “accounted for $28 billion of that increase.” And yet, as a piece in Roll Call noted last month, the F-35 “has been shielded from the sequester” even though it “is almost a decade behind schedule, expected to cost $1.5 trillion and yet critical systems still don’t work. … The F-35 performs poorer than many legacy aircraft.”

The principal reason for the GAO-identified cost overruns? “The Pentagon began building the systems before the designs were fully tested.”

There’s a similar story to be told about the Littoral Combat Ship (LCS). The average cost per ship has doubled since the program’s initiation; the Navy is buying more even though testing won’t be finished for another six years — “we are purchasing first and testing second,” says California Rep. Jackie Speier — and a recent GAO report says “current LCS weapon systems are underperforming and offer little chance of survival in a combat scenario.” Little chance of survival – despite $40 billion in outlays. This helps defend America exactly how?

Matching the military to its peacetime mission and cutting out the waste would permit a substantially smaller budget without diminishing America’s ability to defend itself.

This leaves just one rationale for unbounded military spending: jobs. Conservatives insist military outlays must remain high in order to sustain employment levels. Are they serious? Then apparently all their critiques of the Obama stimulus were wrong, and government really is great at creating jobs. Who knew?

Except, of course, government isn’t. Every dollar Washington spends comes from the private sector — which is far more efficient at allocating economic resources to their highest and best use. True, some economists defensibly claim deficit spending can stimulate the economy; does this give conservatives an escape route? Far from it.

Never mind their aversion to deficit financing generally. Those conservatives who believe in the power of government to stimulate the economy should support even deeper cuts in defense spending. That is because other kinds of spending would stimulate the economy even more, for several reasons. Example: Researchers at the University of Massachusetts, Amherst, point out that the labor intensity in education is higher than the labor intensity of the military, which relies on machinery much more than schools do. So if job creation is the goal, Congress should shift funds from the Pentagon to education.

What’s more, a lot of defense spending ends up overseas: “U.S. military personnel spend only 43 percent of their income on domestic goods and services … while the U.S. civilian population, on average, spends 78 percent of their income on domestic products.” A sailor might blow his paycheck in Bangkok or Berlin, but a teacher is more likely to blow it in Baltimore or Brooklyn.

The truth is that the jobs argument is just plain wrong. Industry-funded studies may claim devastating harm from defense cuts, but they have a powerful motive to paint a grim picture: From 2001 to 2010, defense-industry profits quadrupled. You can’t blame the industry for wanting to keep the spigot flowing.

Disinterested observers, however, find something rather different. The Pacific Research Institute’s Benjamin Zycher points out that inflation-adjusted defense appropriations rose every year from 1981 to 1989, then fell in eight out of the next 11 years. If defense spending were as important to the economy as conservatives pretend, then GDP should have moved up and down in tandem with the Pentagon’s budget. Nothing anywhere close to that happened. Except for two years — 1982 and 1991 — the economy grew steadily throughout the period.

To conservatives, government is a bloated bureaucracy in pursuit of an inflated mission that wastes untold billions with no accountability. They detest that sort of thing when it wears the name of the Environmental Protection Agency or the Department of Education. So why do they give it a pass whenever it puts on a uniform?

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11:21 am - Fri, Aug 9, 2013

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2:45 pm - Thu, Aug 1, 2013
1 note
Chart of the day. No ax to grind here, just useful info.

Chart of the day. No ax to grind here, just useful info.

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4:00 pm - Fri, Jul 26, 2013

The Great Beltway Budget Kabuki Dance

According to The Washington Post,

Negotiations have not started on Capitol Hill, where the two parties are far apart, and many officials on both sides are skeptical that any agreement will be found before the September deadline. Senate Democrats are advancing spending bills worth $1.058 trillion, while Republicans are assuming a total spending level of $967 billion.

Hold the phone.

The two parties are “far apart.” Because Democrats want to spend $1.058 trillion, while Republicans want to spend $0.967 trillion.

That’s a difference of 10 percent.

Here’s a wild and crazy idea: Democrats come down 5 percent, Republicans come up 5 percent. Crisis averted.

Yeah, yeah, big chunks of the budget are “non-discretionary,” which leaves less wiggle room in the discretionary budget, which magnifies the 10 percent difference.

But the mandatory spending is mandatory only in the sense that it is driven by formulas — formulas that Congress can change at any time.

But gosh, won’t the federal government just about starve? Er, not exactly:

image

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3:09 pm
1 note

Of course, The American Society of Civil Engineers says we’re doing just awful. This is pretty much what the society says every year. You don’t think that’s because civil engineers have a vested financial interest in — naaah, that couldn’t possibly be it.

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1:52 pm - Thu, Jul 11, 2013

By now it is well-known that public employee contracts with generous wage and benefits are bankrupting state and local governments across the country and encircling the necks of future generations with an anvil of debt. What is almost completely unknown is that the hard-nosed union officials who negotiate lavish contracts for government workers are often paid to do so with taxpayer dollars.

That is part of a widespread practice called “release time,” in which public employees are paid full-time wages and benefits by taxpayers, yet they report and answer not to government officials (or taxpayers) but to their unions. In turn, release time can be used for lobbying, campaigning, soliciting grievances, union recruiting, and negotiating for higher wages and benefits—all at taxpayer expense… . In 2011, taxpayers funded 3.4 million hours of union work at a cost of $156 million.

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