To The Super Committee: It’s The Spending! (1)

We’ve been through almost a year of dramatic and acrimonious political debate about the government’s deficit, and it isn’t over yet.

Much of the political media establishment has been suffering fits of anguish over alleged “austerity” and “deep cuts” being inflicted upon the defenseless government by Republicans, driven by those terrible Tea Party activists.  But based on the final figures for the government’s fiscal year 2011 (ended September 30) recently released by the Treasury Department, President Obama and the big spenders  have scored a decisive win over those who would shrink government.  As the chart shows after all the sound and fury they managed to increase spending in 2011 over and above the already bloated levels of 2009 and 2010.

In reality  government spending is at a much higher level than just a short time ago and dramatic reductions are easily achievable  [Continued below the chart]

The next chapter in the on-going deficit reduction melodrama is the Great Super Committee, created by legislation passed in July.  Typically, committee members have accomplished nothing in four months, and now the deadline for action is only two weeks away.  While Americans wait, powerlessly, twelve Senators and Congressmen sit in a locked room to negotiate our future, not with us but with each other.  Their goal is a “deal” for $1.9 Trillion in “deficit reduction.”  This may look impressive, but in context it’s trifling.

If they succeed in reaching a “deal” spending will still increase every year.  To meet their goal they do not have to spend less or tax more.  All they have to do is pare back already scheduled spending increases and/or contrive some tax code change that can plausibly be claimed to increase revenue above current projections over a ten year period, beginning in 2013.  That’s an average of $190 billion per year, or 5% of the amount spent in fiscal 2011 (ended September 30.)

If they don’t reach an agreement that passes both the House and Senate by Thanksgiving “draconian cuts” will kick in automatically, beginning in 2013.  Stay tuned for two weeks of contrived, high drama as the deadline approaches.

Next Post: Much more immediate and significant deficit reduction than contemplate by the Super Committee is easily achievable.



4 Comments so far

  1. LiamHorn on November 9th, 2011

    How can you ignore the Bush tax cuts for the top 2%?

  2. Drew on November 10th, 2011

    Liam –

    Because actuarily they don’t amount to squat. You could repeal the tax cuts and impose huge increases…….and Boomer’s analysis wouldn’t change.

    Its just arithmetic. Spending is wildly out of control.

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