The Central Planners’ Projected Crackup

By:  Ralph R. Reiland
10/09/2012
       
The Central Planners’ Projected Crackup

The way the federal government runs things is already bad enough, but it’s officially projected to get only worse, much worse, in the years ahead according to the government’s own number crunchers.

The way the federal government runs things is already bad enough, but it’s officially projected to get only worse, much worse, in the years ahead according to the government’s own number crunchers.

In fiscal year 2011 — October 1, 2010 to September 30, 2011— the Congressional Budget Office (CBO) reports that the federal government spent $3.6 trillion, or 24 percent of the Gross Domestic Product, 24 percent of the monetary value of all the goods and services produced in the United States in that year, the highest federal-spending-to-GDP ratio since World War II.

Federal outlays averaged 19.6 percent and 19.8 percent of GDP, respectively, during the George W. Bush and Bill Clinton administrations.

The CBO also reports that total federal tax revenues in fiscal year 2011 were $2.2 trillion, against $3.6 trillion in spending, producing a shortfall of nearly $1.4 trillion in red ink, a $1.4 trillion annual deficit that’s simply added to the federal debt and paid for by more borrowing and sticking future taxpayers with the tab.

Social Security payouts by the federal government in fiscal 2011 totaled $731 billion. Another $769 billion was paid out in federal benefits during the same period in three health insurance programs — Medicare, Medicaid, and the Children’s Health Insurance Program. An additional $230 billion in fiscal 2011 went for interest payments on the federal debt.

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Ralph R. Reiland is an associate professor of economics and the B. Kenneth Simon professor of free enterprise at Robert Morris University in Pittsburgh.

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