President Obama submitted the 2011 fiscal year budget.
If Congress passes it—and history shows that the approximate amount requested is usually granted—then this will be the highest the USA has ever spent, not just in real dollars, but inflation-adjusted per capita dollars.
The reason to adjust for inflation is obvious. But you don’t usually see the adjustment per citizen. In 1901, there were roughly 78 million citizens; by 2011 this will have increased to about 313 million.
Just because of population increase, ceteris paribus, we would expect total (inflation-adjusted) spending to increase by four times.
More people means more money must be spent to keep the same level of government services per person. On average, more people also means that there is more money that comes in to the government.
So an increase in population does not imply that per citizen spending should increase. If per citizen spending does increase, as you will soon see it has, something in the nature of the citizen-government relationship must have changed.
A plausible argument can be made that the state of the world is not the same now as it was at the dawn of the twentieth century, and that the observed increase in political and technological complexity would naturally mean that more per person should be spent now. These increases in complexity or necessity can also be, as in the case of wars, temporary.
However, a better argument is that an increase in government power and restrictiveness combined with the penchant of democracies to form cliques that wantonly vote themselves funds from the coffers will inexorably drive per citizen spending upwards until a crisis is met.
This picture shows the amount of spending (in 2008 dollars) per citizen from 1900 until 2011.
(Please do not hot link this image.)
The two jumps for both World Wars are obvious, as is the smaller departure for the Korean war, if you look closely. The New Deal is a bare blip. What surprises many people is the decrease during the Clinton years. The economy was booming, then; but, as we recall, a large portion of it was bubbling, waiting to pop.
And pop it did. The money really started flowing with Bush fils. Much of the increased spending is from to the two wars, but there were also generous increases in social spending. The large spike near the end is from the Bush-initiated Keynesian Prayer, a supplication with which Obama earnestly joined his voice.
Try to understand what these numbers mean. First, they are, near enough, in today’s dollars. So when we go back in time, we’re making the right comparisons.
Back in 1901, the federal government spent about $170 per citizen. Remember the inflation adjustment: the average person nowadays could easily pay this, even if that person was the sole earner in a family of four (a total family burden of $680).
Obama is proposing spending about $11,500 per citizen—72 times the 1901 rate. The burden on that family of four will now be $46,000!
Not un-coincidentally, that number is close to the USA median household income. That means if the average family of four were to send enough of what they made to our glorious leaders to pay their share, they would have just enough left over to pay their State the rest.
But the average family of four—those near the median income—actually end up giving very little to the feds. Just under 50%—that’s half of all of us!—pay little or nothing.
Pause there and repeat that tidbit to yourself. This fact will bring to mind the wisdom of Margret Thatcher, who said, “The problem with socialism is that eventually you run out of other people’s money.” When will we run out?
The estimate is that, soon after the end of Obama’s presidency, the size of our national debt plus the amount to be spent on the budget will equal the entire GDP. That means that if every man and of course every woman, plus every business, every corporation, were to, at the end of that year, send in every penny they took in—before expenses—the government could just pay its bills.
We would all of us have to work for one entire year and give all we make to the government, just to keep us going for that year and to pay off our debts to ourselves. But then would come the next year…
My friends, this is nuts.
I hope it is understood that the rate of increase in per citizen spending cannot continue to increase indefinitely. This is true even if you are as “progressive” as Noam Chomsky or the SEIU.
This is true even if you don’t want it to be—especially if you don’t want it to be.