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Federal Spending on Unsustainable Path

Posted by Steve Markowitz on April 14, 2013

It is amusing listening to Progressives when they are forced to discuss the United States’ debt and deficits.  Some begrudgingly agree that the deficit spending cannot be continued at the current rate and that our deficit must be brought under control.  Others incredibly claim that we do not have a deficit problem and the United States can continue borrowing nearly endlessly.  Backing this ludicrous conclusion is the fact that currently the US Treasury Department is able to sell bonds at historically low rates.  The fact that the Federal Reserve is purchasing a significant portion of the bonds is lost on these Leftists.

For liberals that agree America has a deficit problem, the next leg of their argument is that the Country has an income (taxing) problem, not a spending problem.  Not surprisingly, given that nearly 50% of Americans do not pay income tax, this has become a popular fairytale.

Economist John Mauldin published this week some interesting figures from the US Census Bureau and the Office of Management and Budget that show a troubling trend concerning governmental spending.

For 2000 – Total net spending for all levels of the federal government was 3,239,913,876,000.  Dividing this amount by the total number of households of 108,209,000 resulted in an average spending per family of about $30,000.  During that year the medium household income was approximately $42,000 meaning that government spending per household was about 71% of the medium income.

For 2010 – Net spending by all levels of the US government was $5,942,988,401,000.  With 118,682,000 households, this equaled approximately $50,000 per household.  During that same year the median household income was approximately $49,500.  In other words government spending per household was now approximately equal to the household medium income.

It does not take an advanced degree in economics to realize the path the Country is on is unsustainable.


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