3300987

US Federal Spending

October 20th, 2006 06:53 AM

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



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.

3301008

Re: US Federal Spending

October 20th, 2006 07:11 AM

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?

3301014

Re: US Federal Spending

October 20th, 2006 07:15 AM

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.

3301052

Re: US Federal Spending

October 20th, 2006 07:42 AM

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

3301058

Re: US Federal Spending

October 20th, 2006 07:45 AM

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

3301138

Re: US Federal Spending

October 20th, 2006 08:32 AM

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.

3301155

Re: US Federal Spending

October 20th, 2006 08:40 AM

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.

3301183

Re: US Federal Spending

October 20th, 2006 08:51 AM

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.

3301247

Re: US Federal Spending

October 20th, 2006 09:16 AM

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.

3301319

Re: US Federal Spending

Joe Bonham

October 20th, 2006 10:06 AM

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)