I think that Americans will be sorely disappointed in the choices that they have made as of late. As we can see, we have reached new irresponsible heights in central government spending as a percent of GDP. The federal government is now nearly a quarter and all government spending including state and local is well over 40%.
And lets have a look at central government spending in more recent times excluding WWII. We can see that we have reached new levels under the Obamessiah. Even under the dastardly George W. Bush, and his wars, spending was relatively constrained.
You can see, yes, it appears as if recessions do have an impact, we can see that in the recession of 80-81, Reagan increased spending to 22% of GDP (at that time, I thought he was being a good time Charlie and I thought that was irresponsible) but this subsequently dropped dramatically to more normalized levels. I argue that the recession of 1980 was much worse than the more recent one as we saw unemployment rise much higher and were troubled by both inflation and very high interest rates.
Now we are being told that we need to tax more. To me, the principle problem is spending. And this spending will rise even more due to Obamacare in the very near future. We are going to have to divert resources allocated by the free market into the guts of government in a wishful move towards improving the nations healthcare. This is foolish and we will disappointed as heathcare will cost more, will get more scarce, will cost much more in time and effort for the typical American and results will be much worse.
My negativity on the near future of the economic health of the nation can be summed up by having a look at the last great leap forward into socialism in the 1930's...
Benjamin Anderson, the chief economist at Chase National Bank in the 1930s, tried to capture the problem of the big- government president by titling one of his books “When Government Plays God.” His advisers warned him to suppress the title, arguing it might offend. Anderson shifted to the more banal: “Economics and the Public Welfare.” But Anderson’s phrase still reverberates: A government that “plays God,” or at least “plays powerhouse,” can spook markets and employers, whatever the decade.
Nations that rely on government for its national output generally get atrophied in its productive business sectors. Europe is going through that now where in most nations there, government as a percent of GDP is over 50%. The productive econmony just cannot grow fast enough to support the growing and festering pussball of government.
I think that the troubles that Spain, Italy and soon France are having, is going to spread to the USA in the very near future irrespective of how much we 'tax the rich.' What I see in government today is not only juvenile but self destructive. Honestly, i am completely amazed that we are volunatarily and actually supporting this path. Have we become a stupid people? We may be facing a 'fiscal cliff' but after that we are facing government immolation. Satan must be so proud!
2013 Looks a Lot Like 1937 in Four Fearsome Ways - Bloomberg