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Milton J. Madison - An American Refugee Now Living in China, Where Liberty is Ascending

Federalism, Free Markets and the Liberty To Let One's Mind Wander. I Am Very Worried About the Fate of Liberty in the USA, Where Government is Taking people's Lives ____________________________________________________________________________________________ "Extremism in defense of liberty is no vice. Tolerance in the face of tyranny is no virtue." -Barry Goldwater-

Friday, November 05, 2010

Government spending as a percent of GDP.....

State and local government spending as a percent of GDP has been rising dramatically in recent years and this will inevitably cause some governments to default on their obligations......

The US federal government, that I call the leviathan, is to somewhat to blame for the troubles at the state and local levels since much of the spending increases at these entities have been forced upon them by unfunded federal mandates. But they have also created their own problems by promising too much in the form of pensions and medical benefits and these obligations will not be able to be paid.

Having a look at the federal government spending as a percent of GDP, one can see that despite it hovering at around 20% for last several decades, this spending has taken a nasty turn for the worse as this spending has risen to around 25%. It will be very very difficult to reverse this increasing spending trend as entitlements with such programs as Social Security and Medicare will only increase as the first babyboomers collect their payments that they are entitled to after spending their working lives paying into them.

All of this will prove to be an unmitigated disaster as it will prove to be impossible to extricate the nation from its promises and obligations made over many many decades.

You can play with the numbers, download them, check the sourcing if you like, here.


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