Four Spending Myths that Could Wreck Our World

[eridani]

http://www.nationofchange.org/four-spending-myths-could-wreck-our-world-1342628503

We’re at the edge of the cliff of deficit disaster! National security spending is being, or will soon be, slashed to the bone! Obamacare will sink the ship of state!

Each of these claims has grabbed national attention in a big way, sucking up years’ worth of precious airtime. That’s a serious bummer, since each of them is a spending myth of the first order. Let’s pop them, one by one, and move on to the truly urgent business of a nation that is indeed on the edge.

Spending Myth 1: Today’s deficits have taken us to a historically unprecedented, economically catastrophic place.

This myth has had the effect of binding the hands of elected officials and policymakers at every level of government. It has also emboldened those who claim that we must cut government spending as quickly, as radically, as deeply as possible.

In fact, we’ve been here before. In 2009, the federal budget deficit was a whopping 10.1% of the American economy and back in 1943, in the midst of World War II, it was three times that -- 30.3%. This fiscal year the deficit will total around 7.6%. Yes, that is big. But in the Congressional Budget Office’s grimmest projections, that figure will fall to 6.3% next year, and 5.8% in fiscal 2014. In 1983, under President Reagan, the deficit hit 6% of the economy, and by 1998, that had turned into a surplus. So, while projected deficits remain large, they’re neither historically unprecedented, nor insurmountable.

[Champion Jack]

1. K&R