Highest Per Household Spending Since World War II

To say that federal spending topped two trillion dollars in fiscal year 2003, which ended on September 30th, is meaningless to most of us. To say that two trillion, one dollar bills would stack halfway to the moon provides a little better imagery.

How about this image? For the first time since World War II, Government spending exceeded $20,000 ($20,300) per household during the fiscal year 2003.
Yet, federal taxes per household equaled only $16,780.
This means that American families still owe the federal government $3,520.00 per household.
Since federal spending must eventually be paid, $3,520 represents higher future taxes.
Federal spending will create in 2004, alone, a deficit of over $470 billion.

I cannot over emphasize this: all federal spending must eventually be paid for in taxes, which will come, in one form or another, from your family’s disappearing discretionary income.

Don’t Blame 9/11

Homeland security and increased defense spending accounted for some of this increase. Still, defense and 9/11 related spending accounted for less than half of new federal spending since 2001. Compare this with prior American wars.
President Roosevelt cut non-defense spending by 18 percent between 1943 and 1945.
President Truman reduced non-defense spending by 24 percent in 1951, during the Korean conflict.

Some have faulted Congress for using 9/11 and the war on terrorism as an excuse to increase spending for pet programs and to repay special interests. As Representative James Moran (D-VA) observed, “It’s an open grab bag, so let’s grab.”

One Bright Spot? A Short Lived Savings

Federal spending, however, plummeted in one category. Lower interest rates benefited more than just homeowners re-financing their home. It lowered interest rates on the national debt.
From 1998 to 2003, net interest payments on the national debt dropped from $263 billion to $153 billion, a savings of $110 billion.
This could have been spent to pay down the national debt, or to restrain the growth of government or to give a $1,035 tax cut per household.
Instead, Congress spent the $153 billion on new spending. When that money ran out they spent an additional $355 billion for an actual total of $463 billion.
In every day terms, this is like a family winning a $1000 radio show jackpot and going out to buy a $4000 boat.

Where Does the Money Go?

To name just a few, how about these big ticket expenditures to special interests or just plain waste:
$80 billion in corporate welfare, like 500 million dollar loan subsidies to major, profitable corporations busily moving tens of thousands of jobs out of the U.S.
$20 billion in pork-barrel projects, like $36.3 million for opera houses, theater's and museums, $4.2 million for shrimp aquaculture research, $250,000 for Vidalia onion research, $43,000 for the preservation and restoration of Civil War flags. These, are simply a few examples of a nearly endless list of questionable expenditures, especially in a time of war.
$50 billion in waste, fraud and abuse as identified by the government’s own accountants.
$17 billion spent, for which government auditors cannot account.

To curb the current spending spree one doesn’t need to look very far. Our bloated federal bureaucracy provides many opportunities to cut the budget:
The U.S. Department of Agriculture employs nearly 100,000 workers, about one for every four full-time farmers.
The federal education bureaucracy operates 788 programs through 40 agencies at a cost of $100 billion - of which $30 billion never makes it out of the administrative maze.
Since 1996, two-thirds of federal farm subsidies go to 10% of recipients, primarily large, profitable agribusinesses.

A Reality Check

Congress already holds in its hands a number of methods to curtail federal spending:
They should begin to “devolve” programs that naturally and rightfully belong to the states rather than the federal government, such as education, law enforcement and economic development.
They could appoint an independent commission, similar to President Reagan’s Grace Commission, to compile a list of outdated and unneeded programs.
They should discontinue spending for programs that private industry is better equipped to handle, such as job training, business finance and certain types of insurance.
They could also implement better safeguards to combat the pro-spending federal budget bias.
They could courageously stand and vote against pork barrel spending, even for their own states.

Spending reductions will require determination but the alternatives are exponentially less attractive.

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