Paul Krugman would have you believe that we are still in a recession because the government is not spending enough.
Take a look at this:
The 2010 Spending Record
In two years, a 21.4% increase. (emphasis added)
Once again domestic accounts far and away led the increases. Medicaid rose by 8.7%, and unemployment benefits by an astonishing 34.3%—to $160 billion. The costs of jobless insurance have tripled in two years. CBO adds that if you take out the savings for deposit insurance, funding for all “other activities” of government—education, transportation, foreign aid, housing, and so on—rose by 13% in 2010.
As for the deficits, the 2010 total was $1.29 trillion, down slightly from $1.42 trillion. That’s a two-year total of $2.7 trillion, or more than the entire amount during the Reagan Administration, when deficits were supposed to be ruinous. Now liberal economists tell us that deficits are the key to restoring prosperity. But all we have to show for spending nearly 25% of GDP for two years running is a growth rate of 1.7% and 9.6% unemployment.
You would think that, if spending was the key to prosperity, we would have what used to be called “full employment” back in the olden days when I was in college – the 5% employment rate of the GWBush years.
Another bad thing:
By far the biggest percentage-gain revenue winner for the taxpayer in 2010 was . . . the Federal Reserve. Thanks to the expansion of its balance sheet with riskier assets, the Fed earned $76 billion during the year, a 121% increase. The Fed’s windfall is a perfect symbol of our current economic policy. The government is making money because it now controls so much capital, but it is robbing that money from the private economy in the process. It is never a good sign when your central bank is a national profit center.
However, as Sweetness & Light points out,
On the contrary, it is a very good sign if you are a socialist who believes in running a command economy.
That is exactly what the Democrats are after.
The spendthrift 111th Congress is the Pelosi Congress, folks.
Every Democrat you vote for keeps it that way. Remember that on election day.
Don’t miss also Financial Briefing: The Road to Hell Is Paved With Good Intentions and taxpayer dollars.