• So we find ourselves in a position where the public at large believes ‘facts’ that are pure fiction in reality. In such a case, matters will get worse before they can improve.
• People will surrender their jobs, surrender their food, surrender their families, surrender their lives, before they surrender their prevailing belief system.
• We went from basic military spending of $371.0 in 2000 to $737.3 billion in 2008, to basic military spending that is running at $813.0 billion yearly as of April through June 2010. The increase in military spending along with the continual Bush tax cuts will produce a structural deficit even with a return to significant economic growth.
• Where we should have created 16.44 million jobs these last 117 months simply to keep up with population growth, we lost 2.28 million jobs. This leaves us short an astonishing 18.72 million jobs, and the coming revision will make the figure 19.08 million.
To be fair, spending on safety-net programs, mainly unemployment insurance and Medicaid, has risen — because, in case you haven’t noticed, there has been a surge in the number of Americans without jobs and badly in need of help.
And there were also substantial outlays to rescue troubled financial institutions, although it appears that the government will get most of its money back. But when people denounce big government, they usually have in mind the creation of big bureaucracies and major new programs. And that just hasn’t taken place. …
This fact, however, raises two questions. First, we know that Congress enacted a stimulus bill in early 2009; why didn’t that translate into a big rise in government spending? Second, if the expansion never happened, why does everyone think it did?
Part of the answer to the first question is that the stimulus wasn’t actually all that big compared with the size of the economy.
Furthermore, it wasn’t mainly focused on increasing government spending. Of the roughly $600 billion cost of the Recovery Act in 2009 and 2010, more than 40 percent came from tax cuts, while another large chunk consisted of aid to state and local governments. Only the remainder involved direct federal spending.
And federal aid to state and local governments wasn’t enough to make up for plunging tax receipts in the face of the economic slump. So states and cities, which can’t run large deficits, were forced into drastic spending cuts, more than offsetting the modest increase at the federal level.
The answer to the second question — why there’s a widespread perception that government spending has surged, when it hasn’t — is that there has been a disinformation campaign from the right, based on the usual combination of fact-free assertions and cooked numbers.