Feed on
Posts
Comments

Where Did it All Go?

The following bar chart demonstrates the spending levels of the various federal agencies between 2006 and last year. Over that time, federal expenditures increased from $2.66 trillion to $3.72 trillion, an increase of over 40%. During this time period, prices rose by about 8% and population rose by about 3.5%, so in real per capita terms, over a mere 5 year period federal government spending per capita has increased by over 28%. This is larger than real median family income increased over the preceding 30 years.

Percent Changes on the Right, All Figures Nominal

The red bars indicate current spending levels while the green ones indicate past spending levels. Does anyone at all, in Congress, in the press, on the street, in the academy, ever look at this picture and ask where it all went? How can it be possible for spending to have increased by over 28% in real per capita terms, but now all kinds of federal agencies and programs are experiencing … a … crunch? You’d think you were being put on Candid Camera with this sort of rhetoric.

And consider this, even with the “grand budget deal” that would have spending slashed … slashed! by $2 trillion over 10 years, that means we’d be reducing spending from $3.7 trillion (using the latest year as an illustration) to a “mere” $3.5 trillion, still a mountain of spending beyond what prevailed a few years ago (about a 20% real increase per capita). If I asked you the following how would you answer: “your real per capita spending will increase by 20% over the next five years, would you characterize that as a crisis? Would your roof shingles begin to fall off? Would you have to do without heating your home? Would you have to stop purchasing things at Amazon? Of course not. Real per capita increases mean spending over and above what you are currently able to do.

How is it possible to be spending over a trillion dollars more today than five years ago and for anyone to be claiming we are in a crunch? Certainly with the lagging revenues we have a deficit issue, but I urge you to be aware of the rhetoric that makes a deficit problem appear to be like one where agencies cannot somehow afford to do the things they did just a couple of years ago.

And allow me to ask, can some “progressive” who wants even more spending and taxes please point out a year when spending levels were appropriate? And would you kindly do me the favor of comparing how the agencies performed and how our “vital” infrastructure was doing when spending was at those levels? And then can you again answer my question, what the heck has the government done with all of the new money that has been spent since that nirvana?

70 Responses to “Where Did it All Go?”

  1. […] Related links: An Easy Solution to the Government’s Debt-Ceiling Impasse Emily Skarbek on Rejection of Goolsbee Claim‬‏ – YouTube Dr. Rizzo asks, “Where Did it All Go?” […]

  2. jb says:

    Devastating Mike. I am going to spread this one around for sure.

  3. Rod says:

    I was especially surprised at the magnitude of the increases for agriculture and education, both departments that ought to be eliminated entirely. (The other night Brit Hume asked whether conservatives would want the checks to the meat inspectors delayed, and he said there might not be enough meat inspectors. Couldn’t the bloated agriculture departments of the states handle this?)

    I am going to print the graph out and keep a copy of it in my pocket Constitution.

  4. Bob says:

    You really need to add a Facebook Share or Like button. I could/would then share your always insightful posts with my friends (all three of them ;)…but they do have friends, and they have friends….) who otherwise wouldn’t read economics blogs.

  5. chuck martel says:

    Right on, brudda.

  6. Harry says:

    jb, I would like your take on interest rates, giving you broad discretion.

    I think that the only way the government can keep rates low for very long is to keep the value of its currency stable; otherwise, people will discount any action, whether it be Nero clipping edges of silver coins, or QE2, or the prospect of QE3.

    Now, I know timing is both everything or not worth the trouble, even dangerous. Weimar Germany solved its debt problem, and so did Fidel Castro. However, in the ’70’s we experienced two great waves of inflation, which were recognized by the marketplace.
    That was the time when money market funds were born.

    Another question for jb, wintercow, and anybody who is interested:

    During those days there was a multiplicity of ways to finance business, most notably through corporate bond offerings and public offerings of common stock, preferred stock, convertible preferred stock, convertible bonds of good companies. One could learn more about what was going on by reading tombstone ads than by “following” the price of the Dreyfus Fund.

    Today, a few banks have swallowed all the brokers and nearly all the small banks. I bet that hardly any broker sitting in a branch office of Wells Fargo knows what an Equipment Trust Certificate is. My broker was confused when he showed me an NCNB note, and did not know that NCNB was the mother of his company which had swallowed three or four companies at which he has been employed, including two firms in the brokerage business.

    I know it is an oversimplification, but often wars and other grand projects have been followed by great inflations, followed by fruitless efforts to make something out of nothing. In my lifetime, the GI’s came home and went to work. EJ Korvette’s, which would become KMart, was founded by eight Jewish Korean War veterans.

  7. Harry says:

    Note that the big increases are for agencies that regulate us the most, and who can calculate that cost? For every federal inspector reaching his grimy hands into our lives, there are papers to be shown, forms to be filled out, lawyers and accountants to be hired, backhoes to be rented, and hours stolen from us. Not only do they waste the money they get, they waste the money of their subjects.

  8. Rod says:

    One of our problems now is that the horses are already out of the barn when it comes to inflation. If we haven’t felt its full force yet, we will.

    Any attempt to stall inflation invariably produces over-reaction in the marketplace. When Nixon imposed wage and price controls, I was teaching school at my alma mater, and everyone there sought virtue in submitting to a three percent increase. Ignorant academics though we were, we thought that discipline would tame inflation, but over at the farm we saw its effects in shortages of things that were never in short supply.

    I may have told this story here before, but back in July of 1974, I needed baler twine for straw that I was going to bale that afternoon, so I took the pickup over to Clover Leaf Mill and told the owner, “I need three bags of calf grower, two bags of milksaver and ten bundles of baler twine.” I was hot and sweaty, and I needed the baler twine urgently, as a thunder storm was forecast in the afternoon.

    He looked at me like I was a spaceman and said, “We don’t have any baler twine, Rod.”

    “Well, does Agway Dublin have any?” I asked, not relishing the idea of driving to Dublin.
    “No,” he said, “There is no baler twine to be had anywhere on the east coast.” I have to pay better attention to the farm reports, I thought.
    Fortunately, we had friends in Buckingham who had stockpiled more than a year’s supply of baler twine, and they agreed to meet me in Dublin to sell me ten bales at their cost, which was $20 per bale, eight dollars more than the controlled price of $12 per bale. They told me that for the rest of what I might need for the harvest season, I should go out to the Green Dragon in New Holland, where it was available on the black market for $40 a bale. (The Green Dragon was an auction sale barn where, it was rumored, you could buy anything, including tactical nuclear weapons.) That was my first lesson on what happens under price controls.

    The second lesson occurred that same week when the hydraulic cylinder on my baler sprung a leak and needed a new seal inside. Not only were the seals unavailable, but hydraulic cylinders were not for sale at the John Deere dealer. I did find one small cylinder that was good enough for the baler at the Allis-Chalmers dealer, but I paid $78 in 1074 dollars for it. They were bandits, but they had me over the proverbial barrel. (Barrels were probably unavailable, too.)

    When price controls were lifted, everything was plentiful for a while, but Jimmy Carter came along and kicked government spending up several notches and caused $600 billion deficits to be predicted “for as far as the eye can see.” Carter also put controls on the price of “old oil” and “new oil” and thereby caused confusion in the booming oil markets. It was not long before Agway told me they had no regular gas or diesel fuel to deliver to the farm. I had to take the tractors up to the gas station to fill them up, and I even used some home heating oil in my diesel tractor. While the Club of Rome advised everyone that we would run out of oil by 1984 (when Teddy Kennedy would be president, we thought), and advised us all to wear cardigan sweaters to keep warm in the winter (that worked in Plains, Georgia, but not in Rochester, NY). It turned out (we learned fairly recently) that the United States has hundreds of years of fossil fuel resources. The Club of Rome might still be a club, but they only serve lunch Mondays through Fridays. Dues are $50 a year.

    Another lesson I learned from those years was that prices can swing farther than what’s warranted by inflation itself. Shortages, caused by uncertainty or the high cost of materials, can drive up prices way beyond their rational level, especially if people fear the government will intervene in markets. I would not put it past Obama to take an errant lesson from Nixon and impose price controls of his own. He likes to do things like that, sort of like King Canute commanding the tide to stop.

  9. TheBidiBo says:

    Holy crap. It’s even worse than I thought, and I’m pretty far to the right.

  10. Rod says:

    There is a category on the table abbreviated “OPM.” “Other People’s Money”?

  11. Rod says:

    Today on Fox News Sunday, it was revealed that in the Cut, Cap and Balance Bill there is only $110 billion of real cuts for next year. I take it, then, that the deficit will be trimmed only a little and will still be in the $1.5 trillion range, give or take a tenth of a trillion, or $110 billion. I guess I am not insane if I start to hoard cartons of cigarettes to use as currency. And ammo. You could sell ammo by the round or the clip, depending on what you are bartering for.

    And of course the Democrats oppose even these tiny cuts. No mention of what could be accomplished by cutting out high speed rail, for example.

  12. MikeB says:

    My problem is forecasting just when the US will default. I am busy buying up as much gold/silver/platinum as I can afford in the hope that my savings will be protected when the balloon goes up.

  13. Harry says:

    The US will not default. All of its debt is denominated in dollars, which the government can create legally.

    The best way for any country to repudiate its debt is to devalue its money, paying creditors with paper that fetches less. We have gone through that several times in my life.

    Whether it is a good time to buy precious metals is a different question, apart from the question of whether the present price of gold is a good indicator of inflation. In retrospect, we all wish we had bought gold twelve years ago as Gordon Liddy did, but then he got and gets paid extra every time he appears on Fox.

    But I do think it sensible to take a portion of one’s money and invest it in a good company that sells something tangible, as a hedge against the inflation that impends over us all.

  14. Harry says:

    Regardless of what happens in the next few months, or next week, two trillion or so is already baked in the cake. The only way out is a prosperous economy.

  15. 386971 911491Yay google is my king aided me to uncover this outstanding web site! . 530248

  16. 707405 137500Its truly a cool and helpful piece of info. Im glad which you just shared this helpful data with us. Please stay us informed like this. Thank you for sharing. 665650

  17. I love reading a post that will make men and women think. Also, thank you for allowing for me to comment!

  18. bokep gokil says:

    Nice post. I was checking constantly this blog and I am impressed!Very useful information specially the last part I care for such information alot. I was seeking this certain info for a long time.Thank you and good luck.

  19. 貼街招 says:

    Hi there are using WordPress for your blog platform? I’m new to the blog world but I’m trying to get started and set up my own. Do you need any coding expertise to make your own blog? Any help would be greatly appreciated!

  20. Howdy! Do you use Twitter? I’d like to follow youif that would be ok. I’m definitely enjoying your blog and look forward to new updates.

  21. xxx bokep says:

    Awesome blog.Really looking forward to read more. Fantastic.

  22. Great blog post.Thanks Again. Cool.

  23. Thank you ever so for you article.Thanks Again. Really Cool.

  24. biya pay says:

    I value the blog.

  25. Dropshipping says:

    Thanks a lot for the blog.Really thank you! Great.

  26. linkinlove says:

    Thank you for your post.Really looking forward to read more. Much obliged.

  27. linkinlove says:

    Fantastic blog article. Will read on…

  28. Very informative article post.Thanks Again. Keep writing.

  29. fillersfairy says:

    Major thanks for the article.Thanks Again. Will read on…

  30. You definitely made your point. anastrozole for men

  31. porn sexy says:

    credit score calculator equifax free credit report what is considered a good credit score transunion free credit report annual

  32. Hi there to every one, because I am really keen of reading this blog’s post to be updated regularly.It contains nice material.

  33. Some genuinely fantastic info , Sword lily I found this. “Civilization is a transient sickness.” by Robinson Jeffers.

  34. fantastic post, very informative. I wonder why the other experts of this sector don’t notice this. You must continue your writing. I am confident, you’ve a great readers’ base already!

  35. Mua like says:

    Your style is unique in comparison to other people I have read stuff from. Thanks for posting when you ave got the opportunity, Guess I will just book mark this blog.

  36. western porn says:

    Excellent post. I was checking constantly this blog and I’m inspired!Extremely helpful info specially the remaining phase I takecare of such information a lot. I was looking for this particular information for a long time.Thank you and good luck.

  37. traodoisub says:

    Nice post. I was checking constantly this blog and I am impressed!Extremely helpful information particularly thelast part I care for such info a lot. I was seekingthis certain info for a long time. Thank youand good luck.

  38. crazy porn says:

    There is noticeably a bundle to know about this. I believe you made certain good points in features also.

  39. This article is actually a pleasant one it assists new net viewers, who are wishing for blogging.

  40. It’s actually a nice and helpful piece of information. I’m glad that you just shared this helpful info with us. Please stay us up to date like this. Thank you for sharing.

  41. new porn says:

    A motivating discussion is definitely worth comment. I do believe that you ought to publish more about this subject matter, it may not be a taboo matter but usually folks don’t discuss such subjects. To the next! Cheers!!

  42. Nelida says:

    generic ivermectin: ivermectin – stromectol for sale

  43. I love what you guys are usually up too. This type of clever work and exposure! Keep up the superb works guys I’ve included you guys to blogroll.

  44. Jughead says:

    It’s going to be ending of mine day, however before end I am reading this enormous article to increase my know-how.

  45. Thanks a lot for the article post. Want more.

  46. voucher code says:

    Thanks for a marvelous posting! I actually enjoyed reading it,you happen to be a great author.I will always bookmark your blog and may come back down the road.I want to encourage you to continue your great job, have a nice weekend!

  47. C-64c says:

    Excellent post. I was checking constantly this blog and I am impressed! Very useful info specifically the closing part I care for such info a lot. I was seeking this particular information for a very long time. Thanks and good luck.

  48. Hey there! Would you mind if I share your blog with my zynga group?There’s a lot of folks that I think would really enjoy your content.Please let me know. CheersCheck out my blog post: daftar slot online

  49. Looking forward to reading more. Great blog.Much thanks again. Fantastic.

  50. Payton Kline says:

    how much ibuprofen is dangerous learn the facts here now

  51. truong lai says:

    Hi, everything is going sound here and ofcourse every one is sharing data, that’s genuinely excellent,keep up writing.

  52. 貼海報 says:

    Hi! I could have sworn I’ve been to this blog before butafter checking through some of the post I realized it’s new to me.Anyways, I’m definitely glad I found it and I’ll be book-markingand checking back often!

  53. Has anyone ever been to MNP Vape Vape Store in 2719 N Center St?

  54. คาสิโนอันดับ 1 เล่นง่ายได้ไวมาลุ้นโบนัสก่อนโตได้แล้วที่นี่ที่เดียวสล็อต บาคาร่า ยิงปลา ไพ่ (ace card) มีจบครบที่เดียวฝาก – ถอน ไม่มีขั่นต่ำ เว็บตรง มั่นใจ 100 แอดมินบริการ 24 ชั่วโมง

  55. This is very interesting, You are a very skilled blogger. I have joined your feed and look forward to seeking more of your fantastic post. Also, I have shared your website in my social networks!

  56. Cortney Jahr says:

    I’m not that much of a online reader to be honest but your blogs really nice, keep it up! I’ll go ahead and bookmark your website to come back later. All the best

  57. The following time I read a weblog, I hope that it doesnt disappoint me as a lot as this one. I imply, I know it was my option to read, but I really thought youd have something interesting to say. All I hear is a bunch of whining about one thing that you can fix if you werent too busy searching for attention.

  58. hello!,I like your writing so much! share we communicate more about your article on AOL? I require an expert on this area to solve my problem. May be that’s you! Looking forward to see you.

  59. Thank you for the auspicious writeup. It in fact was a amusement account it. Look advanced to far added agreeable from you! By the way, how can we communicate?

  60. Beulah Nian says:

    Whoa! This blog looks just like my old one! It’s on a completely different subject but it has pretty much the same page layout and design. Outstanding choice of colors!

  61. Rupert Rohal says:

    Does your website have a contact page? I’m having trouble locating it but, I’d like to shoot you an email. I’ve got some ideas for your blog you might be interested in hearing. Either way, great blog and I look forward to seeing it grow over time.

  62. source says:

    Thanks for sharing your thoughts about Pok Deng.Regards

  63. Del Shigley says:

    I have to express my thanks to the writer just for rescuing me from this type of challenge. As a result of surfing around throughout the online world and seeing notions which are not beneficial, I was thinking my entire life was done. Existing without the presence of approaches to the difficulties you’ve resolved all through your entire article content is a critical case, and the ones that might have badly affected my career if I hadn’t noticed your website. Your own personal capability and kindness in handling all the pieces was vital. I don’t know what I would’ve done if I had not encountered such a stuff like this. I am able to at this point relish my future. Thanks for your time very much for your reliable and effective guide. I will not think twice to suggest your web page to any individual who will need care on this problem.

  64. Burt Huggett says:

    excellent points altogether, you just gained a brand new reader. What would you recommend about your post that you made some days ago? Any positive?

  65. Darcy Rolley says:

    Youre so cool! I dont suppose Ive learn anything like this before. So nice to seek out any person with some authentic ideas on this subject. realy thank you for starting this up. this website is one thing that’s wanted on the internet, someone with just a little originality. helpful job for bringing something new to the internet!

  66. Would you be involved in exchanging links?

  67. slot toto says:

    A round of applause for your blog article.Really looking forward to read more. Really Cool.Loading…

  68. xe may dien says:

    Great blog you have got here.. It’s difficult to find quality writing like yours nowadays. I really appreciate individuals like you! Take care!!

  69. Hello there! This post could not be written any better! Reading this post reminds me of my good old room mate! He always kept chatting about this. I will forward this article to him. Fairly certain he will have a good read. Many thanks for sharing!

  70. I wish to show some thanks to the writer for rescuing me from this particular incident. Just after browsing throughout the world wide web and getting ideas which are not powerful, I assumed my life was over. Being alive without the strategies to the difficulties you have sorted out all through your site is a serious case, and the kind which may have in a wrong way affected my entire career if I had not encountered the blog. Your primary understanding and kindness in controlling the whole lot was very useful. I don’t know what I would have done if I hadn’t encountered such a step like this. I’m able to at this moment look ahead to my future. Thanks so much for this expert and result oriented help. I won’t think twice to recommend your site to anybody who requires guidance on this matter.

Leave a Reply