US Federal Spending
 

I picked this up off a right-wing blog, but its original source is http://www.heritage.org/research/fea...harts_S/s3.cfm

http://www.heritage.org/research/fea...arts_S/S-3.gif

Two things stand out.

One, is that looking at the general trend of the graph, it follows quite a clear line, except over the 90s. One person on the blog made the comment that Bush was just following the trend after the 90s slump.

Second, is that the increases correspond quite closely to TWAT.

Re: US Federal Spending
 

It's quite a worrying trend for the USA and also for the world economy. Many economically conservative republicans have criticized Bush about the growing spending and for a reason: increasing national debt means increasing sums of money put into pay the interest and the debt also reduces the confidence on the US economy aboard.

What happens when the US economy stops growing and recession starts? Funding cuts from healthcare & education? Police and veterans? Border control?

Re: US Federal Spending
 

Not to mention one of the biggest buyers of US Government bonds... the Chinese government!

This is why there won't be a war between the US and China, the US owes China way too much money.

Re: US Federal Spending
 

And the chances are slim to none that the US will ever pay China back

Re: US Federal Spending
 

But it gives China a lot of influence. They could easily damage the US with that debt.

Re: US Federal Spending
 

As the Economy grows so does the amount we're able to spend.

Heres a graph that shows the GDP growth over the last fifty or so years.
http://www.pewclimate.org/images/figure18.gif

Re: US Federal Spending
 

Sure, but like asked: What happens when the US economy stops growing and recession starts? Besides, I think the USA would have better objectives to spend money on than paying the debt's huge interests.

Re: US Federal Spending
 

Even as a percentage of GDP, this spending is a large increase. I have little faith in GDP as an economic scale at any rate. It was never meant to play the role it does today, and has massive inadequacies.

Re: US Federal Spending
 

Recessions are a natural part of a health economy. It’s a depression that you have to worry about. The economy is said to expand and contract on predictable variables. A recession signals the end to high interest rates and the beginning of a buyers market. So during a recession buy a home, during a recovery you sell at the higher interest rate.

During a depression you have run away inflation which creates a downward spiral very hard to get out of. If the economy is big like the US that spiral would tend to suck in other world economies down with it.

Example of a Recession: Price of oil goes up; the cost of production goes up. When the cost of production goes up the price of the product goes up. When people buy the product they have less money to spend on other necessities. The economy stifles and a recession ensues.

My point here is that there are safeguards preventing a serious depression in the US. Unless opec decides to raise the cost of oil to 150$ a barrel i wouldn't worry about a world depression.

Re: US Federal Spending
 

Our national debt and deficit isn't that different from the rest of the western powers - the big difference is, ours has more consequences (Economic collapse in, say, Germany wouldn't have much of an effect on the world economy as a whole)

Re: US Federal Spending
 

Any countries in the G8 falling apart quickly would have dire repercussions on relatively unnegligable portions of the world.

Re: US Federal Spending
 

But that would have flow on effects to the EU. Economic collapse in the EU most certainly would have a massive effect on the world economy.

Re: US Federal Spending
 

One country collapsing would cause the whole EU to fall apart?

Gee, either European countries have extremely fragile economies or you don't have much confidence in the EU...

Re: US Federal Spending
 

It's called interdependence. ;)

Germany has a very big economy, and its role in the EU is also big. We're talking about collapse here, not just a downturn.

Re: US Federal Spending
 

Well, that's a bummer.

Re: US Federal Spending
 

The EU economy basically is the German economy. There's a reason why the EU-bank has its seat in Frankfurt. The German economy is the third largest in the world, so obviously it would have a huge impact on the global economy.

Re: US Federal Spending
 

Its fortunate that we don't have to be dependent on other countries then. (At least not yet...) :)

Re: US Federal Spending
 

Actually, the US is heavily dependent on other countries, primarily China. Noone has to be dependent, but the doctrine of globalisation is quite popular amongst the rulers of the world, and so each nation is tied into the other by treaties and such.

Anyway, the real topic of this thread is the massive increase in federal spending.

Re: US Federal Spending
 

Also you have a big interdependance with us, canadians.

Just look at the trades between both our countries, biggest in the world.