Federal spending continues to grow

Ten years ago, the federal government spent $2 trillion. This year we’ll spend $3.8 trillion or $3,800 billion dollars. We have virtually doubled spending in just 10 years. The most recent House budget proposes to spend $4.9 trillion 10 years in the future in 2022. President Obama believes that is not enough; he wants to spend $6 trillion. You don’t have to be a math major to see that in total, nobody is proposing cutting federal spending. Fiscal conservatives are trying to limit the rate of growth in federal government spending.

Video courtesy of Chippewa Valley Community Television.

The data used in the preparation of this chart can be viewed here.

Historic interest rates

The federal government is currently adding more than $1 trillion in new debt ever year. For now, this debt is being financed at historically low interest rates. Once interest rates return to historic norms - approximately 3.8 percent higher than they have been during the Obama administration - the cost of adding debt will climb dramatically. Congress will need to cut spending or raise taxes to finance this increased borrowing cost.

Video courtesy of Chippewa Valley Community Television.

The data used in preparation of this chart can be viewed here.

Gross federal debt through 2025

On September 30, 1987 – near the end of the Reagan Administration – total federal debt stood at $2.3 trillion. Our federal government took 200 years to incur $2.3 trillion dollars worth of debt. In the 2011 debt ceiling increase, Congress gave the President approval to increase the debt ceiling by $2.1 trillion. I voted against that measure, but the federal government will use up that $2.1 trillion increase around Christmas of 2012. We will have gone through $2.1 trillion worth of debt in less than two years. It took 200 years to incur $2.3 trillion of debt, and we will incur $2.1 trillion dollars more in less than two years.

When President Obama came into office the national debt stood at $10.6 trillion. It recently surpassed $16 trillion, which is larger than the size of our economy - an extremely dangerous metric.

Here’s one way to think about this: If a family’s debt exceeds total income on an annual basis, and the family doesn’t have the assets to back it up – if they’re in debt over their head - how can they grow their "personal economy"? Every dollar beyond the basics goes towards paying off the debt.

The same thing is true for federal economy. It’s the same dynamic, on a massively larger scale. History tells us when that debt to GDP ratio exceeds 90 percent - and we’re over 100 percent - it harms the economy’s ability to grow out of that debt. President Obama’s budget estimates that our federal debt will grow to $26 trillion. I don’t think it will get to that point because I don’t think we’ll find creditors around the world that would loan us that money.

Video courtesy of Chippewa Valley Community Television.

The data used in the preparation of this chart can be viewed here.

Federal spending continues to grow

Ten years ago, the federal government spent $2 trillion. This year we’ll spend $3.8 trillion or $3,800 billion dollars. We have virtually doubled spending in just 10 years. The most recent House budget proposes to spend $4.9 trillion 10 years in the future in 2022. President Obama believes that is not enough; he wants to spend $6 trillion. You don’t have to be a math major to see that in total, nobody is proposing cutting federal spending. Fiscal conservatives are trying to limit the rate of growth in federal government spending.

Video courtesy of Chippewa Valley Community Television.

The data used in the preparation of this chart can be viewed here.

Federal spending as a percentage of GDP

The cloture vote is the method the United States Senate developed in 1917 to bring unlimited debate to an end. The Senate initially set the threshold to bring debate to an end at 2/3, which would be 67 senators in today’s Senate. In 1975 they lowered that threshold to 3/5, or 60 votes, which is our current level. Before this first cloture vote, the federal government was 2 percent of the economy - 2 cents of every dollar flowed through the federal government. At that time state and local governments represented 5 percent of our total economy so the total cost of government was 7 percent. Today the federal government is 24 percent the size of our economy - 24 cents of every dollar flows through the federal government. Add state and local government (about 16 percent) and we’re up to 40 percent which is the lower level of European-style socialism.

Video courtesy of Chippewa Valley Community Television.

The data used in the preparation of this chart can be viewed here.

Gross federal debt through 2025

On September 30, 1987 – near the end of the Reagan Administration – total federal debt stood at $2.3 trillion. Our federal government took 200 years to incur $2.3 trillion dollars worth of debt. In the 2011 debt ceiling increase, Congress gave the President approval to increase the debt ceiling by $2.1 trillion. I voted against that measure, but the federal government will use up that $2.1 trillion increase around Christmas of 2012. We will have gone through $2.1 trillion worth of debt in less than two years. It took 200 years to incur $2.3 trillion of debt, and we will incur $2.1 trillion dollars more in less than two years.

When President Obama came into office the national debt stood at $10.6 trillion. It recently surpassed $16 trillion, which is larger than the size of our economy - an extremely dangerous metric.

Here’s one way to think about this: If a family’s debt exceeds total income on an annual basis, and the family doesn’t have the assets to back it up – if they’re in debt over their head - how can they grow their "personal economy"? Every dollar beyond the basics goes towards paying off the debt.

The same thing is true for federal economy. It’s the same dynamic, on a massively larger scale. History tells us when that debt to GDP ratio exceeds 90 percent - and we’re over 100 percent - it harms the economy’s ability to grow out of that debt. President Obama’s budget estimates that our federal debt will grow to $26 trillion. I don’t think it will get to that point because I don’t think we’ll find creditors around the world that would loan us that money.

Video courtesy of Chippewa Valley Community Television.

The data used in the preparation of this chart can be viewed here.

Federal spending as a percentage of GDP

The cloture vote is the method the United States Senate developed in 1917 to bring unlimited debate to an end. The Senate initially set the threshold to bring debate to an end at 2/3, which would be 67 senators in today’s Senate. In 1975 they lowered that threshold to 3/5, or 60 votes, which is our current level. Before this first cloture vote, the federal government was 2 percent of the economy - 2 cents of every dollar flowed through the federal government. At that time state and local governments represented 5 percent of our total economy so the total cost of government was 7 percent. Today the federal government is 24 percent the size of our economy - 24 cents of every dollar flows through the federal government. Add state and local government (about 16 percent) and we’re up to 40 percent which is the lower level of European-style socialism.

Video courtesy of Chippewa Valley Community Television.

The data used in the preparation of this chart can be viewed here.

A permanent deficit?

The 18.1 percent line represents the amount the federal government has been able to extract from the economy for the past 50 years prior to this administration. Regardless of the top marginal tax rate - as high as 92 percent and as low as 28 percent - we collect 18.1 percent on average. We’ve only exceeded 20 percent of GDP four times in that 50-year period. During that same 50 years the federal government has spent 20.2 percent of the size of our economy. We have basically locked in a 2.1 percent structural deficit.

Since we hit the housing crisis, we entered a recession. When you hit a recession, income levels drop and tax collection also declines. Our tax revenue declined to 15 percent of the size of our economy. President Obama decided that the solution to the problem was to grow government, so he proposed an $800 billion dollar stimulus. He also enacted the healthcare law - a government takeover of 1/6 of our economy - and then passed the Dodd-Frank financial regulation bill. Those policies grew government from the 20.2 percent average to 25 percent of our economy in 2009. We are looking at growing government as a percentage of our economy to 35 percent by 2035. This is simply unsustainable.

Video courtesy of Chippewa Valley Community Television.

Gross federal debt through 2025

On September 30, 1987 – near the end of the Reagan Administration – total federal debt stood at $2.3 trillion. Our federal government took 200 years to incur $2.3 trillion dollars worth of debt. In the 2011 debt ceiling increase, Congress gave the President approval to increase the debt ceiling by $2.1 trillion. I voted against that measure, but the federal government will use up that $2.1 trillion increase around Christmas of 2012. We will have gone through $2.1 trillion worth of debt in less than two years. It took 200 years to incur $2.3 trillion of debt, and we will incur $2.1 trillion dollars more in less than two years.

When President Obama came into office the national debt stood at $10.6 trillion. It recently surpassed $16 trillion, which is larger than the size of our economy - an extremely dangerous metric.

Here’s one way to think about this: If a family’s debt exceeds total income on an annual basis, and the family doesn’t have the assets to back it up – if they’re in debt over their head - how can they grow their "personal economy"? Every dollar beyond the basics goes towards paying off the debt.

The same thing is true for federal economy. It’s the same dynamic, on a massively larger scale. History tells us when that debt to GDP ratio exceeds 90 percent - and we’re over 100 percent - it harms the economy’s ability to grow out of that debt. President Obama’s budget estimates that our federal debt will grow to $26 trillion. I don’t think it will get to that point because I don’t think we’ll find creditors around the world that would loan us that money.

Video courtesy of Chippewa Valley Community Television.

The data used in the preparation of this chart can be viewed here.