On Jan 27, 2010, at 10:27 AM, Max Sawicky wrote:
> But the numbers say Federal non-defense spending is robust, even
> granting the Obama budget proposal. In 1991 it was 15.1% of GDP,
> a peak after some hits during the Reagan administration (roughly
> 3% of GDP, which is big in this context). Bush I nearly restored it
> to pre-Reagan levels. Clinton took it down to as low as 13.6.
> Bush II brought it back to 15.3, nearly the post-WWII peak. The
> projected level after the current spike to 22.9% is 16.4. It is fair
> to object that some of this growth reflects ever-growing health care
> costs, but it's still public $$.
>
> The BHO policies suck on many levels and could surely worsen,
> but it is an exaggeration to say the non-defense public sector
> is being strangled.
How much of that is pure health care inflation?
Also, as Goldman Sachs (!) points out, a fiscal tightening of 1.5-2.5% of GDP is baked in over the next few years even without policy changes. That could easily throw us back into the vortex of despair.