How Are Those Government Austerity Measures Working?

Both the Wall Street Journal and Investor’s Business Daily agree; Fiscal belt-tightening in Washington is a myth. The Federal government spent a record $3.6 trillion dollars in the fiscal year ending September 30. This is 17% higher than the last full-year of the Bush Administration (2008). The consumer price index over the same period rose 3.7% (Sept.’09 = -1.3%, Sept.’10 = 1.1%, Sept.’11 = 3.9%).

The good news is that the federal deficit as a share of GDP decreased from 10% in 2009 to 8.6% this year. Perhaps with some real spending cuts we can get the deficit to zero in about 100 years or so.

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