Here's a fun fact: non-defence discretionary spending was equal to 3.6% of GDP in 1963. It was also equal to 3.6% of GDP in 2008. It is not behind the increase in government spending as a share of the economy over that time period. It has not made government any less affordable. It is not projected to rise substantially in the future. This is not to suggest that there is no waste in this portion of the government. Without question, there is. This portion of the budget should be subject to close scrutiny, to reform, and perhaps to some cuts (though whether net cuts are justified is far from clear). To pretend that one can balance the budget with cuts focused on this portion of the budget, or that major cuts to this portion of the budget are in any way desirable, is madness. And yet this is what Republicans are doing.What I find crazy is that Obama plays along in this game of "budget cutting" when that is exactly the wrong thing to do during the Great Recession. Budget cuts and rising taxes should be gradually ushered in starting in 2012. Talking about this stuff now is just inviting another 1937 recession.
Sunday, February 20, 2011
Republican Budget Cutting
Here is a bit a blog posting on The Economist that highlights the insanity of the "budget cutting" mania in the US: