GOVERNMENT: THE NEXT BUBBLE TO BURST
June 1, 2010
The Bank of England recently warned that the United States is on the road to the same fiscal failure as Greece, and the Obama administration's insistence on massive public spending and increasing deficits is the reason. At this rate, the U.S. government will be the next economic bubble to burst, say Newt Gingrich, a senior fellow at the American Enterprise Institute, and Dan Varroney, the chief operating officer at American Solutions.
- Federal spending alone this year accounts for 25 percent of our nation's gross domestic product.
- If you add state and local spending, the number is closer to 50 percent.
- Union membership over the past 30 years has declined significantly, from 23 percent of all workers in 1980 to about 12 percent today.
- However, the percentage of union members working for government has soared -- over 50 percent of all union workers in the United States are employed by the government compared with only 17 percent in 1980.
- Government workers make about $10 per hour more than the average private sector worker does.
- In addition, when they retire, taxpayers are on the hook to pay for lucrative pensions promised by a generation of politicians trying to win the next election.
If the size of government continues to grow, there will be less free enterprise and less creation of new wealth and new jobs. The American government will primarily function to spread the wealth. Like in Greece, the economy here will fail, say Gingrich and Varroney.
Source: Newt Gingrich and Dan Varroney, "Government: The Next Bubble to Burst," American Enterprise Institute, May 21, 2010.
Browse more articles on Government Issues