Chris
05-10-2013, 06:14 AM
The problem:
As Nobel Prize winner and freedom fighter Milton Friedman often reminded us, the true size of the government is measured by how much it spends rather than by how much we pay in taxes. As we enter Barack Obama’s second term, a look at government spending patterns during the last few decades offers some relevant—and surprising—insights.
With the one clear exception of President Dwight Eisenhower, all Republican and Democratic administrations between 1945 and 2013 have increased spending from their predecessor’s final fiscal year in office....
When trying to understand the differences in spending between administrations, the president’s ideology or party is a very poor predictor of how much the government will grow. Obama ran for re-election as a big-government Democrat, but his spending pattern (until now) did not quite fit his ideology. By contrast, Reagan ran as a fiscally conservative candidate and George W. Bush claimed to believe in small government, but both oversaw large spending increases.
Out-of-control spending is a bipartisan problem. With a few exceptions, no matter who occupies the White House, the government tends to become larger and more expensive....
Economist Veronique de Rugy @ Spending: A Bipartisan Love Story (http://reason.com/archives/2013/05/09/spending-a-bipartisan-love-story)
A solution:
America faces an alarming growth gap — a gap between where our economy is in the present recovery compared with where our economy should be in an average recovery. More troubling, many economists now believe America faces a new normal with a permanent growth gap that lowers our future economic growth rate from the robust 3.3 percent of the past 50 years to a projected 2.2 percent.
...Though the president and Congress resolved the so-called “fiscal cliff” issue, the economy continues to grow at an anemic pace. The current recovery trails the average American economic recovery by 4.1 million private-sector jobs and $1.2 trillion in real gross domestic product (GDP).
In addition to the economic headwinds created by higher taxes, the president’s new healthcare reform law and a tsunami of poorly conceived federal regulations, there remains a real skepticism among investors that Washington will act soon to credibly address the long-term financial crisis.
The White House doesn’t seem to take it seriously. Their massive Keynesian stimulus failed to jump-start the economy, and now the effects of this spending surge are diminishing the opportunity for all Americans to support their families and contribute to America’s prosperity. Class warfare and populist cries of “tax the rich” are insufficient to return the nation to a fiscally sustainable course. Washington’s problem is not that we tax too little, it is that we spend too much.
Getting spending under control and rightsizing the federal government is the key to reinvigorating our economy and closing the growth gap. The problem is that if Washington were a manufacturing plant, it would be designed to manufacture spending. If we want it to manufacture savings and efficiency, we need to retool the plant.
The credible macroeconomic approach that I have offered in this debate is the Maximizing America’s Prosperity (MAP) Act. The MAP Act would reduce non-interest spending over a decade to 16.5 percent of potential GDP — back to a Clinton-era level — therein keeping spending on a lower, stable, predictable path through economic booms and busts. The MAP Act uses smarter metrics to erect guardrails to keeps future Congresses and presidents from “jumping the rails” to spend beyond our country’s means. The metrics are....
Kevin Brady @ Rejuvenate US growth with spending control (http://thehill.com/blogs/congress-blog/economy-a-budget/298621-rejuvenate-us-growth-with-spending-control)
As Nobel Prize winner and freedom fighter Milton Friedman often reminded us, the true size of the government is measured by how much it spends rather than by how much we pay in taxes. As we enter Barack Obama’s second term, a look at government spending patterns during the last few decades offers some relevant—and surprising—insights.
With the one clear exception of President Dwight Eisenhower, all Republican and Democratic administrations between 1945 and 2013 have increased spending from their predecessor’s final fiscal year in office....
When trying to understand the differences in spending between administrations, the president’s ideology or party is a very poor predictor of how much the government will grow. Obama ran for re-election as a big-government Democrat, but his spending pattern (until now) did not quite fit his ideology. By contrast, Reagan ran as a fiscally conservative candidate and George W. Bush claimed to believe in small government, but both oversaw large spending increases.
Out-of-control spending is a bipartisan problem. With a few exceptions, no matter who occupies the White House, the government tends to become larger and more expensive....
Economist Veronique de Rugy @ Spending: A Bipartisan Love Story (http://reason.com/archives/2013/05/09/spending-a-bipartisan-love-story)
A solution:
America faces an alarming growth gap — a gap between where our economy is in the present recovery compared with where our economy should be in an average recovery. More troubling, many economists now believe America faces a new normal with a permanent growth gap that lowers our future economic growth rate from the robust 3.3 percent of the past 50 years to a projected 2.2 percent.
...Though the president and Congress resolved the so-called “fiscal cliff” issue, the economy continues to grow at an anemic pace. The current recovery trails the average American economic recovery by 4.1 million private-sector jobs and $1.2 trillion in real gross domestic product (GDP).
In addition to the economic headwinds created by higher taxes, the president’s new healthcare reform law and a tsunami of poorly conceived federal regulations, there remains a real skepticism among investors that Washington will act soon to credibly address the long-term financial crisis.
The White House doesn’t seem to take it seriously. Their massive Keynesian stimulus failed to jump-start the economy, and now the effects of this spending surge are diminishing the opportunity for all Americans to support their families and contribute to America’s prosperity. Class warfare and populist cries of “tax the rich” are insufficient to return the nation to a fiscally sustainable course. Washington’s problem is not that we tax too little, it is that we spend too much.
Getting spending under control and rightsizing the federal government is the key to reinvigorating our economy and closing the growth gap. The problem is that if Washington were a manufacturing plant, it would be designed to manufacture spending. If we want it to manufacture savings and efficiency, we need to retool the plant.
The credible macroeconomic approach that I have offered in this debate is the Maximizing America’s Prosperity (MAP) Act. The MAP Act would reduce non-interest spending over a decade to 16.5 percent of potential GDP — back to a Clinton-era level — therein keeping spending on a lower, stable, predictable path through economic booms and busts. The MAP Act uses smarter metrics to erect guardrails to keeps future Congresses and presidents from “jumping the rails” to spend beyond our country’s means. The metrics are....
Kevin Brady @ Rejuvenate US growth with spending control (http://thehill.com/blogs/congress-blog/economy-a-budget/298621-rejuvenate-us-growth-with-spending-control)