Current Events

Monday, August 15, 2011

Government Spending as Percent of GDP Down 20% since 1961

There’s nothing like the Post’s fact checker (See August 14, 2011).  Romney is doing his very best to wrest the title of Dissembler-in-Chief from Newt Gingrich.  In Iowa Romney told his straw poll audience that the federal government took up 27% of GDP during the Kennedy administration and that has now grown to 37% and “we’re inches away from no longer having a free economy.”  That’s sort of correct except for the not having a free economy part, but when you shred out defense and payments to individuals, mostly Medicare and Social Security, federal spending has dropped from 2% of GDP to 1.6%.  This doesn’t fit very well with the Republican mantra of “runaway spending” on useless and wasteful programs that the public doesn’t want.
There is no way we can whittle away at the deficit by cutting into that 1.6%, and there’s no way we can stimulate the economy by shifting priorities within that 1.6%.  It’s clear that we the people have to take on the job of reducing defense spending still further and of reforming entitlements but not by dumping them as proposed by Paul Ryan.  There are lots of ideas around about how to reform entitlements. 
I am uncomfortable about proposals to raise eligibility ages, because not everyone gets to age 65 in the same shape, particularly those who have done hard physical labor all their lives.  It’s different from regular exercise or regular exercise under the supervision of a personal trainer.  Perhaps there should be boards similar to WWII draft boards to determine each person’s minimum eligibility age. 
I am totally comfortable with means testing and increasing contributions from and decreasing payouts to the more affluent, and I would hope to include both income and wealth in that means testing.

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