NY Times delivers this bombshell:
The story of today’s deficits starts in January 2001, as President Bill Clinton was leaving office. The Congressional Budget Office estimated then that the government would run an average annual surplus of more than $800 billion a year from 2009 to 2012. Today, the government is expected to run a $1.2 trillion annual deficit in those years.
What went wrong?
Business Cycle, Bush, more Bush, Bush that Obama extended, and Obama.
Their share of the damage (in the same order): 37, 33, 20, 10 (percent)
Politics aside, I think that this is pretty clear evidence that government has grown too big. The national debt is a symptom of that. A surplus disappearing over several years is another symptom of that. As soon as some money frees up, it disappears. People do the same thing, in anticipation of a paycheck, you might go out to eat or buy a few new movies. Except if you start going in the red, you stop your poor spending habits. Once money is allotted for a federal program, it is hard as hell to remove from the budget.
I don’t think our leaders need to quibble about debt as a percentage of GDP, size of the budget, earmarks, etc. They need to seriously consider what services government should provide and what role it should play in people’s lives. I think by bickering about numbers we are missing a fundamental question. Answering that question (provided the answer is what I expect it to be) will do a lot toward solving the other problems.
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spencerb
Great post. This cannot be expressed any clearer. Political parties shouldn’t even argue about this – our government programs have become whaaaaay to freakin’ expansive.
Republicans have historically liked to argue that liberals are doing too much to expand the role of government. We all see now that Republicans and Democrats alike all boil down to politics. And politics means politicians often looking for nothing more than reelection. You can make a lot more people happy by handing out money than you can make people mad by doing the same thing. Social programs bring in the votes.
Lastly, our country has become reliant on these government programs. Americans have come to _expect_ it all, and our government will be damned not to give it to them. After all, they’re entitled to it, right?
I absolutely agree; there is a fundamental concern here that needs to be addressed. Government needs to be restructured, not streamlined, based on determinations of what it should be responsible for. It shouldn’t be responsible for telling me I can’t talk on a cell phone in my car. It shouldn’t be responsible for keeping a roof over my head nor food in my belly.
I think government is responsible for bastardizing the rule of law so much that the younger generations consider breaking the law an inconsequential act. And then the same old fogeys telling us we can’t send text messages in our cars are the ones wondering why kids are plotting to kill their neighbors and cut out their organs, or why an Asian businessman spontaneously severs a random person’s head on a bus in Canada. Stop passing laws for the sake of passing laws to look like you are doing something, or because your reelection hinges on capturing a certain demographic of votes.
First of all, good to see everyone back surfing the blogs once again.
@Dan – I couldn’t have said it better myself. I think you’re right that people have come to expect a certain level of government interference in their lives. Often, I think people do this without fulling realizing the costs. Both economically and to their freedom.
@Tony – I the line “restructured, not streamlined”. I think it is interesting how sort of radical that sounds. In some ways it is, but overall it shows how entrenched government is in our lives (as the rest of your comment points out). The concept of restructuring the government really is not the radical in the way I think that we mean it here. Honestly, Adam Smith nailed it in 1776, the invisible hand guides people to a socially optimal outcome by attempting to seek their own self-interest. Yes, there are market failures and government can create institutions to deal with that. But we’re ignoring Smith and using the government’s hand to decide society’s interest.
Also, the concept of diluting the rule of law through too many laws seems really interesting to me. I wonder if it doesn’t have something to do with losing freedom and being overly-constrained by the law.
@Both of you – You both bring up concern about politicians. That really raises a fundamental question. It seems like a prisoner’s dilemma game, where the equilibrium ends up being increasing government power.
Last note and I will move this to its own post eventually: I am reading Milton Friedman’s “Free to Choose” and it is uncanny how many parallels between that book from the 80’s and the current political climate there are.
-spencerb