-
It’s About the Legacy, Not the House
April 16, 2013 | 43 comments
-
Understanding the Left’s Demands on What Others Own
March 13, 2013 | 205 comments
-
Football, Fairness, and Hayek
February 1, 2013 | 18 comments
-
An Elite That Still Reject Him
December 24, 2012 | 76 comments
-
Why Rice?
December 11, 2012 | 31 comments
Special Report
Never Has Less Cost More
Dismal economic growth is the flip side of trillion dollar deficits — so expect more of the same, if not worse, indefinitely.
The official verdict is in: Washington has never paid so much for so little. Last week, the Congressional Budget Office released its final tally on the federal government’s “fourth consecutive year with a deficit above $1 trillion.” And in return, America finished the fourth year of its worst peacetime economic recovery since the Depression.
If government spending was supposed to equal prosperity, America has not gotten what it’s paid for. Not that it hasn’t paid a lot.
The federal government spent $3.5 trillion in fiscal year 2012. As CBO observes: “Federal spending has totaled between $3.5 trillion and $3.6 trillion in each of the past four years…” Prior to these four years, government spending had never broken $3 trillion.
Put into perspective, the entire federal debt held by the public did not reach the last four years’ levels of annual spending until 1995.
Little surprise then that Washington racked up mind-boggling deficits over these last four years. Before these last four years, Washington’s annual deficit had peaked at $459 billion. Last year’s deficit? $1.1 trillion — well more than twice the record high before these last four years’ — and the lowest of the four.
Put into perspective, total federal spending did not equal last year’s deficit spending until 1989.
Not surprising these spending-stoked deficits have resulted in an enormous debt increase. Prior to these past four years, federal debt held by the public equaled $5.8 trillion. CBO projected that at the end of 2012, it would equal $11.3 trillion. In four years, this debt has essentially doubled.
Put into perspective, the last four years of federal spending’s deficits have accumulated federal debt equal to all that had been accumulated previously.
For all this federal spending, deficits, and debt, what has America gotten in return? The worst economic recovery of any post-Depression period. In 2009, the economy shrank 3.1 percent. In 2010, it grew 2.4 percent; in 2011, 1.8 percent; and in 2012, it is projected to rise 2.1 percent.
Average the real economic growth of these four years, and you come up with less than 1 percent growth — just 0.8 percent! Even dropping 2009’s negative growth and you get just over 2 percent — a level that would equal weak growth if it were just one year’s, let alone a 3-year average.
If anything could make this all seem worse, it is that Washington is not done. CBO’s latest estimate for federal spending is $3.6 trillion — slightly higher than 2012’s. If Washington avoids the so-called “fiscal cliff,” whereby spending is automatically cut and taxes raised at year’s end, then the deficit will again exceed $1 trillion — for a fifth consecutive year.
And the American economy? Even avoiding the fiscal cliff’s projected recessionary impact, CBO estimates the economy will only grow 1.7 percent — less than in any of the three previous years!
Economics is called the dismal science for a reason, but it has nothing on recent federal budgeting when it comes to dismal.
Washington has just closed the books on the worst chapters in its budget and economic peacetime history. Over the last four years, it has spent like never before, rung up deficits like never before, and accumulated debt equal to all it had run up before.
What has it gotten in return? The worst economic recovery in its peacetime history.
And as though this was not more than enough, Washington is already hard at work on the next installment in this sordid story.
It is said America is afraid of uncertainty arising from the fiscal cliff, wait until it gets a load of fiscal repetition. America has not gotten what it paid for, but it is unquestionably going to be paying for what little it gets. And paying, and paying, and paying.
About the Author
J.T. Young served in the Department of Treasury and the Office of Management and Budget from 2001 to 2004 and as a Congressional staff member from 1987 to 2000.
Letter to the Editor View all comments (28) | Leave a comment
More Articles by J.T. Young
More Articles From Special Report
http://spectator.org/archives/2012/11/19/never-has-less-cost-more
Follow us:
ADVERTISEMENT
Current Issue
- Gerry Ford at 100
- Current Wisdom
- Confessions of a Soft-Drinking Newspaperman
SPONSORED LINKS
FLASHBACK TO: 1995
-
Pope Culture
A man of faith in a godless age is hitting Americans where it hurts.
-
Why the GOP Does Not, Like, Totally Suck
Mr. and Mrs. American Spectator Reader, let P.J. O’Rourke talk sense to your kids.
-
Dames at Sea
-
In the Absence of Guns
In Britain, defending your property can get you life.
-
The Metaphysical Martini
-
Counting the Costs of Clintonism
The debacle of this president’s administration is both a cause and a symptom of the decline of American values. Unless Congress impeaches him, that decline will go on unchecked. An eminent jurist surveys the damage and assesses the chances for the recovery of our culture.
-
Chuck McHagel
It won’t take long for conservatives to scratch this presidential wannabe off their 2008 scorecard.
-
The Legacy of Old John and Mother Fresh-Roasted
-
It’s the Best Time of the Year
The American Christmas, like the songs that celebrate it, makes room for everybody under the rainbow. Is that why so many people seem to be hostile to it?
-
The Bush Crack-Up
Was the President done in by the economy, or by the politics of the economy?
Clip of the Day
ADVERTISEMENT
spike59| 11.19.12 @ 6:46AM
well, elections have consequences...anyone who bitches to me about the economy, taxes, and/or the deficit over the next four years who admits to voting for ObaMao has a serious ass-kicking coming
TLP| 11.19.12 @ 9:24AM
You left out: The Three Million.
May each and every one of them Burn in Hell.
SUBVET| 11.19.12 @ 10:40AM
Hey.....Tim you forgot all the dead people and all those that shouldn't be here.
The POS stole more votes than 3 M.
Virtue| 11.19.12 @ 6:46AM
And we knowingly reelected an utterly clueless, red-diaper baby as chief executive and a commie Senate. We are doomed.
Bill Hussein O'Stalin| 11.19.12 @ 7:05AM
The economy is sending Washington a clear cut message. Washington doesn't care. The party and the musical chairs continues.
TeaPartyNow| 11.19.12 @ 11:37AM
& the American People respond with a resounding silence. Of course D.C. will buy itself more workers & higher pay while they raise taxes & cut services. They get away with it because the American People don't know what is happening in any of their governments any more, & therefor D.C. can & will do whatever it wants, whenever it wants.
& I've got news for you too, both parties are in on the take. Is Boehner asking for a viable solution like less for D.C. & more for America? No, he wants to raise taxes right along side of Obama.
Without the American People able to see, this is what we'll have always. Always us less them more.
D.C. knows that the American People are wholly ignorant & subservient in effect over it.
Von Mises Jr| 11.19.12 @ 7:58AM
Remember that ignoramus Pelosi told her brain-dead drones that $1 of unemployment benefits creates something like $1.73 in economic growth?
Well if you take the last three years of 2% growth on an economy of $14 trillion, I believe you get $280B in increased GDP for a cost of over one trillion more in spending. That means that the multiplier effect is actually about 25 cents on the dollar, or a loss of seventy-five cents on every dollar the Federal Government spends in its Central Planning.
Stupid is as stupid does (Forest Gump).
c. j. acworth| 11.19.12 @ 8:38AM
You know that Tom Hanks is a big-time Obamabot don't you?
Mike G| 11.19.12 @ 8:56AM
Well, Hanks was simply being himself in that movie; no acting involved.
Von Mises Jr| 11.19.12 @ 11:04AM
Exactly right, my friends. Apparently it does not take a genius to memorize a few stupid lines.
Bob K| 11.19.12 @ 7:23PM
Being a movie star is never having to say you are sorry. They get to repeat their lines until they get them right. A movie is not exactly a Broadway Stage Production.
Rhoetus| 11.20.12 @ 10:58PM
She's just a lying commie *itch.
Louis Jenkins| 11.19.12 @ 9:21AM
What did you expect? And the next four years will be more of the same. Striker, a manufacturer of medical devices has announce the cut back of 5% or so, and they contibuted mightily to the Obama campaign. The 2.5% tax on medical devices has placed hardship on them. That's fine. Let the good times roll!! There will be more of the same.
TLP| 11.19.12 @ 9:30AM
These big shots all think that they can BUY OFF the Ideologue, who's Fondest Wish is that, one day, he will line up all of the Successful People in this Country, alongside a Great Long Ditch, and put a Single Bullet in the back of all of their heads.
They always fail to remember that even if you've made arrangements to be The Last One Eaten?
That day WILL come.
And, here it is.
Kwan| 11.19.12 @ 10:28AM
Under Comrade Obama's leadership a stagnant, collapsing economy is what we have to look forward to. An economy where depression level unemployment is the norm, as Comrade Obama's oppressive regulations and taxation force more and more businesses to close their doors, and forcing more and more citizens to be dependent on government handouts. Comrade Obama hopes to eventually declare a national emergency due to the fact that free enterprise/capitalism has failed the American people, and that he has no choice but to nationalize all economic activity, and implement a Soviet-style central government run command and control economy, in order to save the nation. The dictatorial ObamaCare was designed to prepare us for the total government control of our economy, in order to achieve fairness and social justice.
TeaPartyNow| 11.19.12 @ 11:29AM
He might as well. The American People will never limit their government. With a nation of helpless self usurpers, what's the difference between liberty & tyranny. The American People will fight nothing.
Until the American People fight, we'll continue ceaseless decline.
& the above that you talk about, might be one of the few things that would cause the American People to oppose government spending. At some point, the people will have to act.
Bill8472| 11.19.12 @ 11:08AM
I would really like to see some explanation why before 2008, our annual deficit ran at a high of $459 billion, but then suddenly almost tripled to $1.1 trillion.
Inflation doesn't seem to have caused it, so what was it that caused the deficit to explode so disastrously? Did our government start keeping the books differently?
How did we get so quickly from talking about the deficit in terms of less than five hundred billion dollars a year, to more than double that amount?
What have we been doing so expensively differently? Not having a budget, is that it?
What's different in so short a time?
TeaPartyNow| 11.19.12 @ 11:23AM
Government workers unions.
The thing that always gets bigger.
& never gets talked about.
The EPA, the federal workforce.
Or cause of death to liberty.
JD| 11.19.12 @ 1:22PM
Obama's "stimulus" was the big factor in 2009. Since then, it's been more of the same, but not passed legislatively. Entitlement spending is growing thanks to baby boomers as well.
TeaPartyNow| 11.19.12 @ 11:20AM
This is the cost of the American Peoples living without knowing what governments are doing.
D.C. is gearing up to raise taxes & cut military & cut medical pay outs. While at the same time D.C. does what? Expand workers & pay in unions & at the EPA? Bingo!
But no one knows why Obama & Boehner need more to give us less. & no one notices that both sides of D.C. work together to take more & give less.
If the American People knew what was going on, would they stop it? We'll never know because the American People are locked in oblivion in America. So lets just sit here & take it.
Bill8472| 11.20.12 @ 9:25AM
We deplore it now, but back in the French Revolution, the deliberations of the Directory were open to the public, and the public went, cockades on their hats and all, and they were as a mob a participant in the process. What a horror show that must have been for people who wanted orderly government.
But maybe we need that today, for people to attend the sessions of Congress every day and to participate in the process, just to let them know they can't just roll on over us.
Bill8472| 11.20.12 @ 9:26AM
It also wouldn't hurt to have some outspoken folks at certain selected moments of oral argument before the Supreme Court, either.
Bill8472| 11.20.12 @ 9:28AM
Watchdogs.
JimH| 11.19.12 @ 11:30AM
Possibly even worse than the direct costs of government so called services are the costs imposed by regulation. I've pointed out a number of times how large corporations are not necessarily opposed to all the new rules spewing from Washington. This is because they are better able to bear their costs than their smaller competitors. I work for one of the larger banks and the other day one of our executives came to speak to the serfs. He spoke of the current regulatory environment and the difficulty smaller banks have complying with the rules. To be fair, he did not point this out as necessarily a good thing. He did not say it was bad either.
Suzyqpie| 11.20.12 @ 7:41AM
Hi JimH I was in one of those execs-to-the-serfs meetings this wk also. Cliff notes on what we got, the big companies (us) have the "administrative infrastructure" to deal with the govt bureaucrats and decrees. The implication being that we can survive but perhaps our marginally or substantially smaller competitor can't. We can, therefore, capture a larger market share. That might be good for us in the short view but there are a lot of people employed by those "smaller" competitors. My question, how is our tyrannical WDC central planners served by a reduced crop of business to plunder for taxes?
Who Knows?| 11.19.12 @ 12:02PM
The “permanent campaign”?
Where have I heard of THAT?
Why, wasn’t it Bill Clinton who famously spent 8 long years mostly campaigning, and doing some governing? And, NOW, we have the next iteration of Obama, who’s accentuated the campaigning and decreased the governing.
What does that tell you?
Look, the permanent government has passed the tipping point, and there’ll be no going back---short of a cataclysmic political or natural or economical disaster. And, I continue to believe there’s going to be a massive economical correction, that will make the real estate write down look like small beer.
All any future Democratic Party leaders know to do is COPY Obama and Clinton, because their compatriots in the liberal power pyramid will only need cover to continue their permeating takeover of the economy. We are getting to experience fascism, American hate style.
And, the American stupid party, the GOP, has leaders who resemble the farmers who brought on the Dust Bowl. When confronted by worsening problems, they double down on their loser strategy!
Demographics is destiny. So, bring on the illegals, let’s have them vote—for more government as taker!
You can only weep, and marvel in horror at the slow dance of death of America, soon enough to be a fast step off the freedom cliff.
Rhoetus| 11.20.12 @ 10:59PM
Party like it's 1999. Delegate - why work?
Occam's Tool| 11.19.12 @ 12:26PM
Bash your enemies.
Cut spending on stupid domestic issues.
Cut taxes and regulations to stimulate business. Make the taxes permanent.
Make any non defense spending increases require a super majority (2/3) in both houses.
Make any tax increases require a 2/3 majority in both houses.
Make any tax decreases require only a bare majority in both houses to pass.
Recognize that Government is usually a necessary evil; almost never a good.
These are simple rules to follow.