Sunday, November 27, 2011

Our spending Problem

From: Larry Trout

'The failure of the supercommittee marks a good time to highlight just how out of control our federal spending really is. To see the matter in a clearer light, let's leave aside all disputes over tax revenues for the time being, and focus purely on spending.
The Congressional Budget Office (CBO) says that federal spending has increased from $2.73 trillion in fiscal year 2007 to $3.60 trillion in fiscal year 2011. That's a whopping 32 percent increase in just five years. (Americans should have been so lucky with their incomes.) That figure has nothing to do with diminishing tax revenues. It is strictly the amount by which federal outlays have increased.
Looking forward, the CBO projects (see table 1-1) that the federal government will spend $5.68 trillion in 2021. That's an increase of 58 percent over 2011, and 108 percent over 2007. In other words, on our current trajectory, annual federal spending will more than double over the 15-year span from 2007 through 2021.
Given this substantial level of projected growth in federal spending, it doesn't seem like it would have been very hard to cut $1.2 trillion off of that number — thereby cutting 2021 spending from $5.68 to $4.48 trillion. Even $4.48 trillion in spending in 2021 would be an increase of 64 percent versus 2007 spending.
But that's not what the deficit committee was charged with doing — it wasn't charged with cutting $1.2 trillion from fiscal year 2021 spending. Instead, it had a far, far easier task. It needed only to cut spending by that amount over the entire decade from 2012 to 2021.'

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