WSJ: "The 2010 Spending Record"
“Excluding those three programs, spending rose by about 9 percent in 2010, somewhat faster than in recent years,” CBO says.
Somewhat faster. You’ve got to laugh, or cry, when a 9% annual increase qualifies as only “somewhat faster” than normal.
What did Washington spend more money on? Well, despite two wars, defense spending rose by 4.7% to $667 billion, down from an annual average increase of 8% from 2005 to 2009.
Once again domestic accounts far and away led the increases. Medicaid rose by 8.7%, and unemployment benefits by an astonishing 34.3%—to $160 billion. The costs of jobless insurance have tripled in two years. CBO adds that if you take out the savings for deposit insurance, funding for all “other activities” of government—education, transportation, foreign aid, housing, and so on—rose by 13% in 2010.
As for the deficits, the 2010 total was $1.29 trillion, down slightly from $1.42 trillion. That’s a two-year total of $2.7 trillion, or more than the entire amount during the Reagan Administration, when deficits were supposed to be ruinous. Now liberal economists tell us that deficits are the key to restoring prosperity. But all we have to show for spending nearly 25% of GDP for two years running is a growth rate of 1.7% and 9.6% unemployment.
Those slow growth numbers have contributed to the deficits by yielding paltry tax revenues. Individual income tax receipts fell again in 2010, by 1.6% to $901 billion. As recently as 2008, individual income tax revenues were $1.15 trillion. Corporate tax revenue climbed a healthy 38.6% to $192 billion, but that’s still well below the $304 billion of 2008. This only underscores how much deficit reduction depends on a growth revival.
And growth revival will only happen when Washington injects some certainty into the market. Enacting new spending measures and not sending clear messages on policy changes will only hinder recovery.