Sunday, March 21, 2010

Federal Spending Adjusted for CPI by President

In a discussion with some friends we started talking about spending and which Presidents, Party, and time periods had the most and least. One of the factors I thought important was to adjust the total Federal Spending for inflation.

From the OMB the total outlay number was obtained. The CPI number was found on the Bureau of Labor Statistics website. Then it was easy to adjust the total outlay number and reduce or increase it based on the CPI. Remember the US experienced deflation back in the 1920's and 30's.

The blue line is the inflation adjusted number and uses the right y scale. The purple line is the actual spending and uses the left y scale.

A few things were surprising to me. The US really cut spending back dramatically at the end of WWII. There was no delay at all!

Then using those same numbers, I took the amount of decrease/increase by President for their term. To be fair that number was divided by the number of years they were in office. These numbers were surprising to me. I always thought Reagan was going to be much higher because of the large deficits he ran, but, it shows his deficits were caused by tax cuts more than increased spending.

Carter, Clinton, Nixon, Eisenhower, Bush I, Coolidge, Truman, and Harding were the winners in keeping spending in check. W, Hoover, Wilson, and Roosevelt were the big spenders though Wilson had WW I to deal with and Roosevelt had WW II.

The increase in real dollars must stop. The graphs clearly show that even adjusting for inflation gov't spending is on an upward trend that is unsustainable. As much as I want universal health care in the US, doing it the way being proposed and increasing the deficit another trillion is wrong.

One item that neither party even talks about is defense spending. We must cut defense spending too! Why is defense spending so sacred?


Keith said...

Thanks for the good data. Much easier to see what is real. Roosevelt also was high because he tried to spend his way out of an economic crisis, which then ran into the period of war spending. Regarding defense spending, the real question will eventually become, What happens when all we can afford is defense spending. This becomes the endpoint. The fall of, I won't say all, but many great civilizations has been when the burden of tribute or taxes to support and provide for the defense for a government becomes disproportionately greater than the services it provides to its people. It happened most recently with the collapse of the Soviet Union and we are headed down the same path. Face it, this country is pretty evenly divided in opinion on the direction that a governing administration should be taking the country. I don't believe that this administration with its set of policies will be able to close that gap nor an administration proposing the alternative. We are headed towards critical mass with the outcome either an economic/financial collapse or political upheaval or both. Unfortunately I believe it is inevitable. Even our political leaders cannot work together. The divide is too great to be closed and I don't think a third party, as much as I might agree with the hope and the enthusiasm it might generate, I am afraid that 20% to 30% on either end of the spectrum would result in yet even more fragmentation. Like Howard said, I am it will be a different country for our grandchildren, and certainly it would seem we have already seen the good times, or am I just getting old.

al fin said...

We will never know what a bullet US taxpayers dodged when the Copenhagen climate agreement fell apart. Mr. Obama was prepared to pledge trillions of dollars in climate reparations to third world countries.

After Obamacare, the next big project to be pushed through Congress will be immigration reform. That should help to re-shape the nation tremendously over the next several decades. Mr. Obama wanted to leave his mark on the country, and it is likely that he will.

There will no doubt be a lot more bailouts as well, totalling several trillions of dollars more before we are through. Bailing out states, bailing out companies with big union contracts, bailing out financial interests that overlap with the ruling class, and perhaps helping to bail out foreign countries.

Employment continues getting worse. Entitlements are exploding to take up ALL the budget when including interest on the ballooning national debt. Public employee pensions are going unfunded into the trillions of dollars.

The true federal debt may be approaching $100 trillion. If you are Nancy Pelosi, you are going to want to pass another few $trillion bills before the year is up. If she loses her majority, she loses her chance to dictate.