Fiscal Cheat Sheet: Unsustainable Spending
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We thought it might be helpful to re-release our “Fiscal Cheat Sheets,” which outline key economic and fiscal repercussions of government overspending. Please see below for an excerpt from “Unsustainable Spending,” and click on the document name to view it in its entirety.
Washington seems unable, or simply unwilling, to get control of its unsustainable levels of spending. The problem is not new; with few exceptions, government has always overspent (creating deficits by spending more than it took in) regardless of how much it taxed.
The federal government has run a deficit every year since 1969, with the exception of the years between 1998 and 2001.
Recent explosive spending growth has made a bad situation much worse.
Federal government spending has averaged around one fifth, or 19.7 percent, of our economy since World War II. This year, federal spending will account for roughly one quarter, or 24.6 percent, of the nation’s GDP.
All told, Washington has overspent to the tune of $13.7 trillion. In May, University of Maryland economist Carmen Reinhart, an expert on debt, told Congress the national debt is approaching a level that will have significant negative impact on jobs and economic growth.
It is impossible to tax, or even to grow, our way out of the coming fiscal crisis; spending must be reduced to sustainable levels.
For more of our “Fiscal Fact Sheets,” check out today’s re-release of “[Ir]Responsible Spending,” and check back tomorrow for “Consequences” and “Uncertainty.”