Thursday, March 31, 2011

The fundamental federal budget question is: how much is enough?

Since history is a measuring stick the answer is simple math.

From the founding of our nation,1787-1849 (63 years) federal spending averaged 1.7% of GDP. For the next 51 years, 1850-1900 (including fighting the Civil War) it averaged only 3.1%. From 1901 till 1930 (including fighting WWI) it never reached 8% and averaged approximately 3.2%. Even at the height of the progressive movement and FDR’s New Deal, federal spending as a percentage of GDP never went above the 1934 level of 10.7%. For the first 100+ years of America’s existence, the government provided its Constitutional duties with 2.3% of GDP on average.

Today the federal government is spending is approximately 40% of GDP and that number is rising.

Now that we all now know the truth, we all know what needs to be done.

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