Saturday, January 23, 2010

US Debt 8: Big Government Getting Bigger, So Are Their Debt

There's a good article in The Economist this week, "The growth of the state: Leviathan stirs again".

This is chart 1 of the article, showing that big governments are getting bigger, especially UK and the US.

Notice how total government spending were more than 50 percent of GDP in UK and France. While in the US, it has now reached 40 percent of GDP. I think the figures there are total for both national/federal and local government units (state, province, county, city, etc.).

Another chart projects the growth of US federal government alone. It is projected to grow to more than 40 percent of GDP by 2040. If spending by local governments are to be iincluded, which by themselves are also growing, then US total government spending should be similar to that currently in UK and France.

For the past few years, I noticed that The Economist was veering towards the big government philosophy. I seldom saw articles criticizing growing intervention in many governments around the world, especially the developed world. So it is refreshing to see this article. Among the relevant portions are the following:

"Interest groups spend hugely to try to affect political decisions: there are 1,800 registered lobbyists in the European Union, 5,000 in Canada and no fewer than 15,000 in America. Mr Bush’s energy bill was so influenced by lobbyists that John McCain dubbed it the “No Lobbyist Left Behind” act."

I highly recommend this article to my friends. It should be one consideration for them when they decide whom to vote in the coming national and local elections in the Philippines this coming May.

Meanwhile I wrote this last December 16, 2009:

Fiscal Deficit and Irresponsibility

This chart from The Economist, November 19, 2009,
Original data from the US Congressional Budget Office (CBO),

This is one face of fiscal irresponsibility, of persistent budget deficit (expenditures larger than revenues). For the past 29 years, except for a few years during the (ironically) Democrat leadership of former Pres. Bill Clinton, the federal government has been on deficit, stretching to even bigger deficit in the next 10 years, as projected by the CBO.

And note: this is federal deficit alone. Various local governments -- states, counties and cities -- also have their own set of deficit and rising public debt.

Fiscal deficit and irresponsibility. They are similar. Current over-spending and over-borrowing administrations will not be around anyway when it's time to pay off those huge debts.

See also 
US Debt 1: How Bloated is the US Govt? May 08, 2006
US Debt 2: Private Sector Bailout of Government, September 26, 2008
US Debt 3: Crisis of Irresponsibility, October 13, 2008
US Debt 4: Obama and US Entitlement, November 11, 2008
US Debt 5: Obama's Taxes, Bail Outs, $56 Trillion Debt Bomb, November 13, 2008
US Debt 6: Stimulus Trap, $1.75 Trillion Deficit, and Taxation Blackhole, March 08, 2009
US Debt 7: US Budget Deficit and G8 Debt, July 29, 2009

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