The past week has brought good news from both Governor Jindal and Mayor Landrieu regarding cutbacks in the number of employee take-home cars. As noted in a Times-Picayune editorial, when Governor Jindal took office, Louisiana’s fleet of employee cars was 10th largest in the nation. This is ludicrous, particularly when one considers the relative size of our state.
Government Spending
Posted by Jamison Beuerman
on September 01, 2010
Budget, Spending, Transparency, Transportation / View Comments
Budget, Spending, Transparency, Transportation / View Comments
Last week, on August 19th, Americans for Tax Reform revealed their annual Cost of Government Day, which, according to ATR, is the day “on which the average American has earned enough gross income to pay off his or her share of the spending and regulatory burdens imposed by government on federal, state, and local levels.” As this year’s Cost of Government day landed on August 19th, this means that Americans spend 231 days of the year working just to pay off imposed government costs. More astounding is that when calculated, this means 63.41% of our national income is consumed by government costs. This distressing news if further compounded when one considers that only two years ago, Cost of Government Day fell on July 16th.
One reassuring aspect is that Louisiana, for once, ranked at number one in something other than obesity, poverty, failing schools, etc. Along with Alaska, Louisiana’s cost of government day for 2010 was July 28th, the earliest COGD in the nation. This is taken with a grain of salt, however, when compared to 2008’s national COGD of July 16th. What we are witnessing is an incredibly dangerous slide into insolvent big government costs. The pace indicated by the month difference over two years is breathtaking, but only in a troubling way. ATR diagnoses in detail the many root causes of this increase in government costs. Two particularly interesting explanations include increase in government employee payroll and taxpayer migration. Because Louisiana has one of the highest government worker rates per capita, as well as a state income tax, it’s extremely surprising to see our state ranked at the top.Either way, the report confirms that our nation is embarking on a downward spiral into a black hole of government costs and endless growth. Louisiana is just the state slowest in teetering over the brink.
As of January 22, the current public debt totals more than $12.3 trillion. The Congressional Budget Office reports that if current laws and government spending remain the same, the budget for FY 2010 is estimated at more than $1.3 trillion.
During the Middle Class Task Force meeting, Vice President Biden and President Obama announced new tax cuts to help American middle class families. The following day, Obama proposed a freeze on spending.
Tax cuts generally increase consumer spending. This year American families will most likely use additional savings to pay off their debts. This also happened following last year’s economic stimulus.
A freeze in government spending would help reduce the federal deficit. However, the announced budget freeze accounts for only 17% of the budget, leaving out large sectors with increasing costs (Medicare, Medicaid, military spending, and homeland security.)
The rate of future economic growth looks increasingly uncertain. New laws reducing government revenues and increasing government spending could still increase the federal budget deficit. By 2020 the federal debt could reach 67% of the GDP, the highest level since the 1950s.
Where do we go from here? There are no easy answers. For a look at some of the options, take a look at the CBO’s suggestions for decreasing the federal deficit.
