Increasing Deficit / Spending Pressures

We’ve seen that total Federal spending has remained fairly stable as a percent of GDP except during economic downturns and emergencies. That is actually remarkable given the enormous growth in retirement and medical care pass-throughs in the budget. Meanwhile, tax cuts and “spending through the tax code” have resulted in lower revenues. The result is the large ongoing deficits that started with the Reagan administration. We saw that we are borrowing about one third of our federal budget now. Clearly that can’t continue forever.

At the same time there is a critical need to invest. The 1950’s and 60’s highway infrastructure is crumbling, and we need to make twenty-first century investments in our energy sector which will yield enormous benefits in the future. At the same time the aging population will require continued funding for retirement and medical care. And since the world as a whole is not meeting climate goals, dealing with the effects of climate change will require huge additional infrastructure investments. Think about New Orleans after Katrina.

Clearly, we have better uses for money than corporate buybacks. In the section below, we look at how we can address all these issues.

Declining Economic Mobility
Principles
Subscribe
Notify of
guest
0 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments

Relevant Articles

Scroll to Top