About Those “Draconian” Spending Cuts
Posted by John Hitchcock on 2011/10/08
As most Americans expected, they didn’t happen. According to the CBO, Federal spending increased by 4.2 percent in Fiscal Year 2011 over Fiscal Year 2010. So, all that Democrat screaming about all those horrible and draconian spending cuts didn’t actually happen. What a surprise.
We still have a long way to go in sorting out the pressing issues facing the nation, and we don’t all agree on the solutions. Foreign policy questions abound, our energy policy is a mess and we still need to bring down those unemployment numbers. But at least there’s one thing we’ve managed to nail down, and that’s spending. Everyone figured out that we have to cut costs and stop running up the deficit, leading us to take quick, substantive action. So… how’s that working out for you? According to the latest CBO report… meh.
Defense spending, where Democrats look first for any cutting? It increased a lethargic 1 percent, as did Medicaid spending. Social Security and Medicare, on the other hand, increased 4 percent, according to The Hill’s reporting. That would mean none of those four even reached the total Federal Budget increase of 4.2 percent. So where was the huge increase?
According to the OMB, Defense spending in 2010 accounted for 19 percent of the Federal Budget, Social Security was 20.4 percent, and Medicare and Medicaid combined for another 19 percent. That means an entire 58.4 percent of the Federal Budget fell below the overall increase in Budget spending, large chunks of it well below. That really leaves only interest on the debt and non-defense discretionary spending as places to look for the major increases in spending. And the interest rate is near zero, record-low territory.
All these draconian cuts? Didn’t happen. All these draconian cuts in non-defense discretionary spending? Absolutely didn’t happen. But, hey, maybe the Federal Government increased spending by less than the inflation rate? We can hope. Oh well, that hope would be dashed. According to the Federal Government, the Consumer Price Index rose by 3.8 percent in the 12 months ending in August. That would mean that, while Defense spending didn’t come close to matching inflation, the overall Federal Budget increased faster than inflation. And as I’ve shown, non-defense discretionary spending necessarily increased much faster. Draconian cuts in non-defense discretionary spending? That was a big lie.
And here’s a real kicker for people putting money in savings accounts. You can get 1 percent interest on your money. That means, if you put 10 dollars in a savings account last year, it would be 10 dollars and 10 cents now. But what cost 10.00 last year costs 10.38 this year. Your ten bucks you saved and got interest on just lost 28 cents in buying power, so you’re 28 cents worse off than when you started. But then again, you get the added pleasure of paying taxes on that dime you got in interest. So you’re actually worse off than that 28 cent loss in buying power.
All while the government keeps spending more and more while claiming to make “draconian” cuts.
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