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Just Saying

September 24th, 2013
This is Krugman's chart showing the U.S. budget as a percentage of potential GDP. To accentuate my point, I highlighted Republican administrations in red, and Democratic administrations in blue. There's a pattern there, though it may be hard to discern if you are conservative. Bgdpchart01
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  1. Troy
    September 25th, 2013 at 00:46 | #1

    true conservatives have a thing for not liking Republican spending all that much, either.

    Well, after the fact at least.

    They’ll point to the conservatives the American People put in control of the House in 1994 and 2010 and take the credit from Clinton and Obama.

    Even though Clinton vetoed the Republican tax cuts that basically destroyed the nation’s finances (just like the LDP tax cuts destroyed Japan’s I might add).

    Also, taking off my devil’s advocate hat, potential GDP is kinda bogus, since the levels reached in the previous decade required the American consumer borrow $100B a month, that’s almost $1000 per household per month.

    Looking at fed spending vs GDP:

    http://research.stlouisfed.org/fred2/graph/?g=mHc

    a different picture emerges.

    The Republican Congress did hold the line on expansion in the 1990s (giving time for the Democratic tax rises of 1991-93 to bite), while as the economy went to hell in 2008 spending to GDP has simply exploded and still needs to come down.

    I am actually, as you might guess, sympathetic with that view.

    http://research.stlouisfed.org/fred2/graph/?g=mHd

    is real government spending (all levels) per capita (age 25-54).

    $44,000! That’s a decent paying job per working-age person, almost, and certainly a well-paying gov’t job per every 2 people!

    I don’t even understand how this is possible, frankly. I realize gov’t spending recirculates into the wider economy instantly, and a lot of that spending is SSA and Medicare, but gov’t spending in the US is simply immense, and we need to raise taxes A LOT to pay for it all.

    But raising taxes any more on the middle class will tank housing and the wider economy, and the rich have hired thousands of people to defend their wealth from further tax predations.

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