www.csua.org/u/kys -> economistsview.typepad.com/economistsview/2008/03/what-caused-the.html
Updating the New Deal March 05, 2008 What Caused the Increase in Federal Spending During the Bush Administration? There is a persistent myth that the increase in federal spending during the Bush administration is due, in large part, to an increase in spending on domestic programs.
Some may think the President's recent attempts to squeeze domestic appropriations are being made in response to an explosion of domestic discretionary funding during his Administration... But this is not correct: there has been no such funding explosion for domestic discretionary programs. and fiscal year 2008, funding for domestic discretionary programs has ... shrunk both as a share of the budget and as a share of the economy. In contrast, appropriations for defense and other security-related programs have increased more rapidly than any other area of the budget -- even more rapidly than the costs of the "big three" entitlement programs: Social Security, Medicare, and Medicaid. Each table divides the federal budget among four program areas: 1) defense, veterans, homeland security, and international affairs (ie, defense and security programs); Table 1 divides the budget pie into its four components ... The table reveals that defense and related programs have grown from less than 22 percent of the non-interest budget to more than 29 percent in just seven years. The most significant reduction occurred among domestic discretionary programs...
Cbppt1 Table 2 compares the growth rates of the four areas of the budget. shows: a) the nominal or unadjusted average annual growth rates of the four program areas; and c) the growth rates adjusted for both inflation and population. We find that: * Defense and related programs have grown far faster than any other area of the budget, while domestic discretionary programs have grown at the slowest rates.
Cbppt3 As Table 3 shows, while non-interest expenditures as a whole have grown noticeably faster than the economy, domestic discretionary programs have grown more slowly than the economy (and thus have shrunk as a share of GDP). In contrast, funding for defense and related programs has been growing at an extraordinary rate. Funding for these programs has shot up by 2 percent of GDP in just seven years. To put this in perspective, it is expected to take more than two decades, from 2010 to the mid-2030s, for Social Security to grow by two percent of GDP... Even excluding the costs of the wars in Iraq and Afghanistan and the global war on terror, funding for defense and related programs has grown at an average annual rate of 48 percent per year since 2001, after adjusting for inflation -- substantially faster than the growth in Social Security, Medicare, and Medicaid. Conclusion Despite rhetoric to the contrary, domestic discretionary programs have not been growing rapidly. In fact, this is the only part of the budget where costs have been shrinking relative to the economy, which means these programs are not putting upward pressure on revenues. By contrast, funding for defense and related areas has been growing far faster than any other part of the budget, much faster in fact than Social Security, Medicare, and Medicaid. Moreover, defense remains the fastest growing area of the budget even if one excludes the costs of the wars in Iraq and Afghanistan and the global war on terror.
This report needs to be considered along with the critical work of Stiglitz and Bilmes on how self-destructive our wars and occupations have been and continue to be, always remembering how much more destructive for others our wars and occupations have been.
Link to comment | March 05, 2008 at 01:56 AM anne says... a country of war and occupation vastly increasing military spending even as taxes are repeatedly cut especially for the wealthiest, while social spending grows more slowly than the economy and even declines in real per capita terms. The vast increase in military spending is supported not be taxes but by borrowing draining credit for private domestic investment, leading to the Federal Reserve increasing credit with no consideration for the use. Costly-high profit mortgages are forcefully sold by lenders with no attention from the Fed even though problems are recorded from studies discussed in the New York Times, housing prices are driven higher while domestic investment beyond housing grows tepidly as does the economy. Even as hedge funds openly begin to invest against the continued mortgage boom, the Fed and many financial institutions find no problem.
Link to comment | March 05, 2008 at 02:53 AM anne says... Joseph Stiglitz finds problems in the economic mix from the beginning of the Administration of George Bush, especially so in understanding that we have never supported war and occupation through borrowing, while we are vastly understating the costs of war and occupation, while we are hiding the costs of war and occupation, while we are growing curiously slowly. Stiglitz repeatedly calls attention to problems from relative lack of private domestic investment on to the terrible military costs, but who really pays attention?
Link to comment | March 05, 2008 at 02:59 AM anne says... Beyond then the terrible but not really comprehensible cost of wars and occupations that best those subject to war or occupation, we are in the midst of $3 trillion in war and occupation and beyond all else there is an unwillingness by so many analysts to make clear what is so obvious to all who seek clarity.
Link to comment | March 05, 2008 at 03:04 AM anne says... What matters then how much damage we have done to ourselves, while continually denying the damage, while refusing continually to recognize the damage that has become costly beyond comprehension? We are building a forever war economy, destructive to ourselves and beyond that descriptive term to others.
Link to comment | March 05, 2008 at 03:11 AM anne says... pid=20601039&sid=a21xUaGoRzLk&refer =home March 5, 2008 Stiglitz the Nobelist Gets Math Wrong on Iraq War By Amity Shlaes We have then the attacks on Joseph Stiglitz, amid the astonishing silences. I imagine the problem must be in the math, though boys, especially Nobel prize winning economist boys are supposed to be ever so good at math. Notice the attack on Stiglitz by the self-same attacker of Franklin Roosevelt.
Link to comment | March 05, 2008 at 04:59 AM robertdfeinman says... I'm happy to see someone talking about this, but Kogan still (partially) falls into the propaganda trap of treating "entitlements" as part of the budget.
Federal Pie Chart lately, but there is an updated version out. What is striking is that militarism as grown from 50% to 54% of the discretionary budget, using their calculations. I haven't read Stiglitz's new book, but, perhaps, it will bring these issue into the forefront. The last person to tackle the effect of excessive militarism was Chalmers Johnson, and even with three books on the subject he failed to get any traction. This is unsurprising given how many people are feeding of this government trough. He calls it the military/industrial/congressional complex. And once congress is part of the process there is no oversight left. The military/industrial part makes sure that there is enough money spent in key congressional districts so that those representatives will not be willing to raise objections to other boondoggles. If they do so, they risk reprisals that will affect their constituents (and their chance for re-election). The most worrying part is that experts like Johnson see no way to correct the situation; Perhaps if the working classes get squeezed enough and someone can explain the source of their pain they may push back. Given the resilience of militarism over the past 60 years, even this seems remote.
Link to comment | March 05, 2008 at 08:29 AM kthomas says... Last I checked, Alan Greenspan and the rest of his cronies did nothing to stop these types of loans from flooding the market. There's now evidence that the Feds forcefully intervened to stop States from enforcing thier own laws.
Link to comment | March 05, 2008 at 08:59 AM anne says... "Costly-high profit mortgages are forcefully sold by lenders...
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