NCPA - National Center for Policy Analysis

Federal Spending Continues to Increase

October 21, 2011

Maybe it's a sign of the tumultuous times, but the federal government recently wrapped up its biggest spending year and its second biggest annual budget deficit, and almost nobody noticed, says the Wall Street Journal.

  • This is said to be a new age of fiscal austerity, yet the government had its best year ever, spending a cool $3.6 trillion.
  • That beat the $3.52 trillion posted in 2009, when the feds famously began their attempt to spend America back to prosperity.

What happened to all of those horrifying spending cuts?  Good question.

  • The Congressional Budget Office (CBO) says that overall outlays rose 4.2 percent from 2010 (1.8 percent adjusted for timing shifts), when spending fell slightly from 2009.
  • Defense spending rose only 1.2 percent on a calendar-adjusted basis and Medicaid only 0.9 percent, but Medicare spending rose 3.9 percent and interest payments by 16.7 percent.
  • In somewhat better news, federal receipts grew by 6.5 percent in fiscal 2011, including a 21.6 percent gain in individual income tax revenues.
  • The budget deficit increased slightly in fiscal 2011 from a year earlier, to $1.298 trillion.
  • That was down slightly as a share of gross domestic product to 8.6 percent, but as CBO notes, this was still "greater than in any other year since 1945."

Some increase in deficits was inevitable given the recession, but to have deficits of nearly $1.3 trillion two years into a purported economic recovery simply hasn't happened in modern U.S. history.

Source: "A New Spending Record," Wall Street Journal, October 19, 2011.

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