Investors Business Daily is out today with an analysis that show that spending by the federal government did not decline in 2011 but rather increased by 5%. Spending by state governments did not decline in 2011 but rather increased by 5.2%. IBD points out that this data contradicts the position of analysts who have blamed the current economic slow down on reduced government spending. Needless to say, IBD is correct. The real surprise is that anyone that the media calls an analyst actually thought that spending was being reduced.
Federal budgeting is done by using a baseline budget. Each year, the amount set for each program are inclreased by about 7%. Any increase of less than that amount is considered a "cut" in the language of the Washington budget folks. That's right, an increase of 6% is called a 1% cut in Washington. This system was set up by the Democrats almost 20 years ago in order to avoid having to justify "increases" in spending from year to year. As a result, spending has climbed year after year by much greater than the level of inflation, federal spending has climbed to an unsustainably high proportion of GDP, and the USA is moving towards bankruptcy.
It would not be hard for one of the Republican presidential candidates to take on this system of baseline budgeting. Imagine what would happen if each year the budget started at the level of the previous year rather than getting an automatic 7% boost. In the language of Washington, there would be an immediate 9 trillion dollar cut in the deficit for the next decade. There is no reason why Americans cannot be told the truth about the actual level of spending coming out of Washington. It is time for them all to tell the truth.
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