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This is hardly surprising

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This is hardly surprising

Gosh, what a shocker: State and local governments continue to spend more money than they have.

Be afraid.  Be very afraid.

Coming from Illinois, a state that ranks at the bottom of almost all business and fiscal metrics, the news from the Census Bureau that between 2007 and 2012, total expenditures for state and local governments increased by 18.2%, from $2.7 trillion to $3.2 trillion, while total revenue declined 1.1% over the same five-year period, from $3.1 trillion to $3.0 trillion, was hardly surprising.  Our government overlords just can’t seem to help themselves.

Now, to be fair, the increase in expenditures in the early part of that timeframe – say 2007 to 2010 – is somewhat understandable, given the need for government amelioration of the impact of the recession. Indeed, spending on welfare and unemployment compensation were among the main drivers of spending growth.

With government spending it’s always a “heads-I-win, tails-you-lose” proposition.

However, what depresses (but doesn’t surprise) me is what happens after 2010.  See the chart below:


See that little red line?  Technically, the recession ended in early 2009.  Even being generous and stipulating that ameliorative spending needed to be maintained or even increased for the following year, the level of spending continued to rise – as is typical of government spending – even as revenues continued to decline.

Now granted, charts like this can be misleading sometimes.  But seriously, with government spending it’s always a “heads-I-win, tails-you-lose” proposition.  When times are tough, the spenders argue “we’ve got to help people in need by spending,” and when things get better they say “what, don’t you want to share the good times?” 

Ditto, of course, for the federal government.  Spending is always on an upward trajectory, regardless of circumstances.  Even so-called “fiscal hawks” never dare to actually attempt to reduce spending, but instead struggle (usually in vain) to simply reduce the planned increase thereof.

All of which explains why we’ve got an $18 trillion federal debt (not including unfunded entitlements) and cumulative state and local debt of over $4 trillion (estimated for the end of FY2015).

Have a nice day.

 

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Angus DuBois
Angus DuBois
Contributor
Angus DuBois is the nom de plume of an entrepreneur of 20 years who, in cowardly fashion, prefers to keep his/her business identity a secret. Comments can be forwarded to angus@nexxuspublishing.com.

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