Friday, December 09, 2005

The Truth is Out There

Item: GDP is up (page 3), rising to 4.3 percent in the third quarter.

Item: Since January, the economy created 1.6 million payroll jobs. The unemployment rate remained at only 5 percent in November -- historically low -- jobs and jobless claims having recovered from a Katrina "spike."

Item: Though the minimum wage hasn't risen since 1998, the earned income tax credit results in about the same hourly compensation as 1982.

Item: Interest rates and inflation have risen, but mostly due to (hopefully temporary) energy prices (page 4)--and both remain historically low.

Item: Despite predictions, home sales haven't slowed.

Item: The Federal budget deficit decreased by 80 billion last year (page 9) and, as a percentage of GDP, is below recent peaks.

Item: Productivity grew between 4.1 percent (page 6-7) and 4.7 percent in the third quarter.

Item: Public debt topped 8 trillion. But that figure ignores inflation; in real terms, the actual level is about the same as it was in 1980. And the amount of public debt held by foreign governments is stable:

(source: Treasury Department)

Item: Armed with similar data, Angry Bear created a nifty chart:


(source: Angry Bear)


Conclusion: I'm unhappy with the Administration's inability to reduce public spending. Still, as Angry Bear observes:
while spending on Defense and Homeland Security (the red line) has indeed risen quite sharply under the Bush administration, other types of discretionary spending (the green line) have risen only quite modestly, and are still slightly below where they were in 1995.
So don't overreact. America's economy is booming, "galloping" even--especially as compared with Europe.

More:

Angry Bear's data here and here. And don't miss Pejman Yousefzadeh in Tech Central.

Still More:

Senator Jon Kyl (R-Ariz.) summarizes the Bush economy. And Jerry Bowyer on National Review Online publishes this "killer" chart:


(source: Bush Boom Continues Unabated)

(via Glenn Reynolds, RedState.Org)

3 comments:

phil said...

Would true conservatives countenance the fiscal rape of their children and grandchildren?
One thing the Bush Administration clearly has been very good at is focusing the attention of the press (and by extension the American people) on issues that they want to highlight. This has had the effect of advancing the Bush agenda, but has had the added effect of deflecting focus away from things that the Administration does not want to highlight. One of those issues is clearly the rampant, runaway spending of your tax dollars by Bush and the Republican majority congress. At this point there can be no doubt that, as they try to focus your attention on issues like stem cells and Supreme Court nominations, Bush and the Republican Congress are spending us all into a hole from which it will take us, our children and our grandchildren years to recover.

You don’t need to take my word for this, nor the words of any democrat or Bush-hater. You need only to read what conservatives like George Will are saying, or the people at conservative think tanks like the Heritage Foundation and the Cato Institute. The Cato Institute recently completed a report on the spending habits of all US presidents during the last 40 years. If you’re interested in reading the report I’ve included a link at the end of this post.

If you want to continue to believe that Bush and Congressional Republicans are “on your side” or if you care only about saving stem cells and banning gay marriage perhaps you should read no further. But if you’re interested in the truth and are concerned about your financial well-being and that of your children, perhaps you should read on. Here’s some of what the Cato Institute report had to say about presidential spending over the last 40 years:

All presidents presided over net increases in spending. As it turns out George W. Bush is one of the biggest spenders of them all. In fact he is an even bigger spender than Lyndon B. Johnson in terms of discretionary spending.

The increase in discretionary spending in Bush’s first term was 48.5% in nominal terms. That’s more than twice as large as the increase in discretionary spending during Clinton’s entire 2 terms (21.6%) and higher than Lyndon B. Johnson’s entire discretionary spending spree (48.3%).

Adjusting the budget trends for inflation Bush looks even worse; his spending rate is much higher then Lyndon Johnson’s. In other words, Bush expanded federal non-entitlement programs in his first term almost twice as fast each year as Lyndon Johnson did during his entire presidency.

George W. Bush is the biggest spending president of the last 40 years in both the defense and discretionary spending categories by a long shot. He beats Johnson by almost 4% in defense spending growth and more than 3% in domestic discretionary spending growth.

And conservative columnist George Will points out that federal spending has grown twice as fast under President Bush and congressional Republicans as under President Clinton. And with respect to the argument that this profligacy is related to 9/11 and homeland security, Will and the conservative think tanks have noted that over 65 percent of the spending increase is unrelated to national security.
Will further reports that Congressional Republicans (who achieved their majority by promising fiscal discipline) have presided over an orgy of pork spending with your tax dollars the likes of which have never been seen before. In 1991, the 546 pork projects in the 13 appropriation bills cost $3.1 billion. In 2005, the 13,997 pork projects cost $27.3 billion. Does that sound like fiscal discipline to you?

You may support Bush and the congressional Republicans because of some vague promise of “progress” on social issues with which you and the Republicans agree. In that case perhaps you are entitled to refer to yourself as a “social conservative.” But nobody who calls themselves a fiscal conservative could support Bush and the Republican Congress who are spending your tax dollars in an orgy of profligacy the likes of which has not been experienced in our lifetimes. You can continue to deny yourself this truth, but be assured that true conservatives know the truth. Bush and the Republican Congress are asking you to mortgage your future and the futures of your children and grandchildren in exchange for soft “promises” on social issues. You are justifying the fiscal rape of your children and grandchildren perpetrated by your “moral leaders” in exchange for a vague promise of gains on social issues.

Do yourself and your kids a favor; look them in the eye and explain to them why you have chosen to saddle them with these financial burdens, explain to them your reasoning. Then look in the mirror and explain to yourself how you can continue to support the people who you know in your heart are screwing you and to your kids. Is that morality? Is that conservatism?

Read the whole Cato article here:
http://www.cato.org/pubs/tbb/tbb-0510-26.pdf

Read the Will column here:
http://www.suntimes.com/output/will/cst-edt-geo17.html

Leo said...

It`s an interesting debate; watching the war in Iraq and the immense financial resources expended to keep the war machine operating at peak efficiency (not to say the troops well fed - love those Halliburton cafeterias that serve lobster and filet mignon!) I wonder just how long the US economy can continue fund its policy to 'force project' in the world. As a citizen of a neighbouring country that recognizes that it is the US military that provides much of the necessary muscle to protect us from harm, I am always very concerned about how Republican presidents can argue about fiscal conservatism on one hand and spend like the dickens on the other. It happened in Canada as well; under the Mulroney years, spending increased and the deficits remained fairly stable at about 30 to 40 billion, while the politician argued strenuously for fiscal discipline.

I am heartened to see the economy growing, employment up and spending down; Just keep it up and start living up to your 'fiscal disciplinarian' policies.

Carl said...

Phil-

I get it, I get it. I said I wasn't happy with the Republicans' failure to trim the discretionary spending budget. But:

1) Anytime Bush proposes cuts, or slowing the rate of increase, in particular programs, liberal and the media raise a stink ("Bush to cut benefits for minorities, handicapped").

2) The Democrats are unlikely to do better.

3) As Angry Bear and I attempt to demonstrate, compared to GDP, Bush's spending isn't as bad as you claim.