Reality Check on "Dramatically Reducing Govt Spending"

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iVillage Member
Registered: 06-28-1997
Reality Check on "Dramatically Reducing Govt Spending"
74
Thu, 11-17-2011 - 2:28pm

Here is an eye-opener for all of you "We need to dramatically cut Government Spending NOW, with NO increases in taxation!" crowd.

The graph below clearly shows the reversal in the decline of our Gross Domestic Product (GDP) after the implementation of President Obama's 'stimulus'. The 'why' behind this is the fact that Government Spending accounts for 38% of our GDP. The infusion of Federal funds actually worked to 'stimulate' Production - which is measured by the GDP - reversing the decline in GDP, and causing a near normal growth pattern in our GDP during the last two years.

Graph of Real Gross Domestic Product

Unfortunately, it seems to take significantly more than 'normal' growth in our national GDP to meaningfully reduce our currently horrific national unemployment figures. Comparing the above graph with the one below shows the direct effect on Employment of the huge dip of 4-5% in GDP following the Crash of '08 and the resultant Recession - an immediate rise from 5.5% unemployed to slightly over 10%. It also clearly illustrates how, once 'demand' suffers from high unemployment and consumer hesitancy, even 'normal' increases in our GDP do not quickly result in higher employment figures. (Interestingly, with so many still out of work, and the GDP going UP, someone is profiting from the increased productivity of our economy - and that someone is NOT American Workers. Who, I wonder, could those someones be?)

Now here's some quick math on the relationship between 'cutting' government spending and our GDP:

Percent of our GDP reliant upon Government Spending = 38%

So:

Cutting Government Spending by 10% would remove 3.8% from our GDP.

Please compare the two charts again and consider the immediate results of a 3.8% retraction in GDP on our national employment rate. Only this time the effects would happen when the unemployment rate is already in excess of 9%!

Now, explain to me how we don't need a 'balanced' approach of tax increases and smaller federal budget cuts to effectively reduce our Deficit without further damaging our economy.

And then explain how you will deal with the massive rise in unemployment resulting from the affects of

~ SW

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iVillage Member
Registered: 03-02-2009

I don't think we can start crediting the government with producing anything. If they produce security, then they also produce hate, fear, mental anguish, lies... so many things, mostly bad.

"Resist, we much. We must, and we much. About that, be committed."

iVillage Member
Registered: 09-30-2011

you're mistaken.

iVillage Member
Registered: 09-30-2011

In what bizzaro world would the people of this country stop all defense spending? The liberal bizzaro world, perhaps.

In their liberal Nirvna world.

iVillage Member
Registered: 09-30-2011

The bizarro world of lizzie_b where defense contractors can take their business elsewhere and prosper with the goods and services they sell.

Right...'cause what other country would want the best technology.

iVillage Member
Registered: 05-13-2009
The best technology is not coming from the US M-I complex, just the most expensive and least useful to sustain the planet. Nuclear submarines, aircraft carriers, stealth bombers, star wars weapons shield

Oh yeah! there are a lot of people lining up for that.

The best technology sadly has little to do with what defense contractors provide.
iVillage Member
Registered: 09-30-2011

The best technology is not coming from the US M-I complex, just the most expensive and least useful to sustain the planet. Nuclear submarines, aircraft carriers, stealth bombers, star wars weapons shield

Sorry, I wasn't counting the iphone.

Oh yeah! there are a lot of people lining up for that.

Lining up?

iVillage Member
Registered: 11-20-2011

chestnuthooligan wrote:

"The best technology is not coming from the US M-I complex, just the most expensive and least useful to sustain the planet. Nuclear submarines, aircraft carriers, stealth bombers, star wars weapons shield"

I think those items are very essential to "sustain the planet" in terms of preventing nuclear war and keeping rogue nations in check.

iVillage Member
Registered: 05-13-2009
I think spending 43% of the worldwide defense spending budget, when the next closest country spends 7% is madness. Can we perhaps spend only 5 times as much as any other nation?

I'm not really worried about rogue nations all that much, but I do worry about nationless terrorists with access to dirty bombs. No sub, bomber, or aircraft carrier can guard against that threat. They are becoming anachronisms of 21st century defense.

Even rogue nation leaders are not usually suicidal, Quadaffi, Sadam come to mind. N Korea and Iran may develop nuclear weapons; it really appears to be inevitable no matter what type or US administration is in power, but while MAD is in affect for those nations with much to lose, they are unlikely to use them.
iVillage Member
Registered: 03-02-2009
Due to our spending on national defense, many of our allies are able to spend a lot less than they normally would have to. They know we will be there to defend them.
We also need to keep on the cutting edge with our military with the Red Chinese out there building up their military.

"Resist, we much. We must, and we much. About that, be committed."

iVillage Member
Registered: 05-13-2009
"Red Chinese"? What century are you living in?

I don't think China has any interest in competing with the US militarily, because they've got us on the ropes economically.

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