Posted in Big Government, Europe, Fiscal Policy, Government Spending, tagged Big Government, Chaos, Europe, Fiscal Policy, Government Spending, Riots on September 30, 2010 |
47 Comments »
Riots and protests have swept across Europe, as populations lured into government dependency are upset that there’s no longer enough money to maintain the existing level of redistribution. Here’s an excerpt from a BBC report:
Tens of thousands of people from around Europe have marched across Brussels in a protest against spending cuts by some EU governments. Spain has held a general strike, with protesters in Barcelona clashing with police and torching a police car. Other protests against austerity measures have been held in Greece, Italy, the Irish Republic and Latvia. …In Greece and the Irish Republic, unemployment figures are at their highest level in 10 years, while Spain’s unemployment has doubled in just three years. …Police sealed off the EU headquarters and barricaded banks and shops ahead of the protest in Brussels. It was described by unions as a day of action under the slogan “No to austerity, priority to jobs and growth”.
Americans may be tempted to smugly scoff at Europe’s troubles, but it’s just a matter of time before the same problems afflict America
. This chart is based on Congressional Budget Office projections (an optimistic “baseline” scenario and a more realistic “alternative” scenario) showing how the burden of federal government spending is about to skyrocket because of demographic changes and entitlement programs.
In the optimistic scenario, the federal government climbs to 45 percent of GDP. Add in state and local government, and that means the total burden of government will be about 60 percent of GDP – higher than France, Sweden, and Greece today. In the less optimistic scenario, the total burden of government will be in uncharted territory, perhaps akin to Cuba or North Korea. Needless to say, America will be convulsed by riots well before this point.
The solution, of course, is to limit the growth of government. During the Bush-Obama years, howerver, politicians have been heading in the wrong direction.
The only bright side, at least for those who feel good when others suffer, is that Europe’s welfare states will have descended into social chaos and barbarism by the time the riots start in America.
Read Full Post »
Posted in Big Government, Capital Gains Tax, CBO, Debt, Deficit, Fiscal Policy, Government Spending, JCT, Laffer Curve, Republicans, stimulus, Supply-side economics, Taxation, tagged CBO, Congressional Budget Office, Debt, Deficit, Fiscal Policy, Government Spending, JCT, Joint Committee on Taxation, Laffer Curve, Republicans, stimulus, Taxation on September 30, 2010 |
28 Comments »
In the “Pledge to America” they unveiled last week, House Republicans promise they will “launch a sustained effort to stem the relentless growth in government that has occurred over the past decade.” Who better for the job than the folks who ran the government for most of that time? …Republicans, you may recall, had a spending spree of their own during George W. Bush’s recently concluded administration, when both discretionary and total spending doubled — nearly 10 times the growth seen during Bill Clinton’s two terms. In fact, says Veronique de Rugy, a senior research fellow at George Mason University’s Mercatus Center, “President Bush increased government spending more than any of the six presidents preceding him, including LBJ.” Republicans controlled the House of Representatives for six of Bush’s eight years.
Redemption is a good thing, however, so maybe the GOP actually intends to do the right thing this time around. One key test is whether Republicans do a top-to-bottom housecleaning at both the Congressional Budget Office and the Joint Committee on Taxation.
These Capitol Hill bureaucracies are not well known, but they have enormous authority and influence. As the official scorekeepers of spending (CBO) and tax (JCT) bills, these two bureaucracies can mortally wound legislation or grease the skids for quick passage.
Douglas Elmendorf said extending breaks due to expire at year’s end would increase demand in the next few years by putting more money in consumers’ pockets. Over the long term, he said, the tax cuts would hurt the economy because the government would have to borrow so much money to finance them that it would begin competing with private companies seeking loans. That, in turn, would drive up interest rates, Elmendorf said.
Read Full Post »