Federal overspending is not a new problem


Well, it appears that the federal government (we the people) tried punting the fiscal football downfield again. It is my estimation this punt was a shank, going only a few yards. Tough fiscal decisions lie in the near future.

Despite the vocal stance of many, the root cause of the problem goes back further than the previous administration. (By the way, I think it odd that those who blame much of the problem on the tax rate cuts of the early 2000s so hardily endorsed extending over 98 percent of those cuts. And they did this without offering anything substantial in the way of true spending reform.)

One could probably trace the root cause back to the mid 1960s, when the explosion of federal government programs began, starting with the war on poverty and extending through EPA, OSHA, SDWA, ESA and a host of other government programs and departments.

I’m not saying that some of these programs were or are not necessary in some form. However, I am saying no mechanism was put in place over those years for the funding of these programs on a long-term basis.

It was easy in the ’60s, ’70s, ’80s and ’90s to use excess Social Security and Medicare funds to provide the funding, trading Treasury notes for the dollars collected.

However, Medicare has had to start redeeming those notes in the recent past and just this past year Social Security did the same thing.

Through the ’60s, ’70s, ’80s and ’90s (and the most of the first decade (the ’00s) of the 21st century, government revenues ranged between 17.5 percent and 20 percent of GDP. This is true, even though there was periodic tinkering with tax rates, etc., with the top marginal rates falling from 90-plus percent in the early 1960s to 35 percent in the 2000s.

For most of that time government spending was generally around 17.5 percent to 22 percent of GDP. Now we are faced with spending over 25 percent with revenues below 18 percent.

This is unsustainable and the recent tax bill does nothing to cut into the 25 percent figure in any meaningful way.

As our population ages and more people file for Medicare and Social Security, it only serves to exacerbate the problem.

What is the answer? There are two primary answers, a growing economy and/or a wider tax base.

Which would you choose?

Al Cummins

Walla Walla


Log in to comment