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Reason Foundation

This is Not Family-Style Spending

Anthony Randazzo
February 3, 2010, 9:58am

President Obama says be wants to cut the deficit. He says he wants fiscal responsibility. He says his government should consider its finances the way an American family would. And he says that he'd rather not have to use the stimulus money.

This just doesn't seem to stack up against what is actually happening. For two reasons.

First, the president says the government should spend like a responsible family, only living within its means. Then why a $3.8 trillion budget and expansion of the national debt? Because the president, Ozrsag, Geithner, Romer, and Co. believe that the near-term problem is unemployment. So the attitude is spend now because "we have to" and then get the spending under control.

But is that what a family would do? No, if a family was $500,000 in debt they wouldn't add an addition on to the house so that they'd have enough room for all the kids. They wouldn't buy a car to get to work "because they had to" going into more debt. The responsible family would live in tight quarters. Use public transportation or friends to get to work. It wouldn't be fun. It wouldn't be easy. But it would be necessary.

We are not doing that as a country. We are trying to spend our way to job creation (by unproven means). We aren't making the hard decisions the president keeps talking about. We aren't choosing to cut excessive use of taxpayer funds from the future. We aren't putting ourselves on stable economic ground. We're adding to the house and buying another car because we've told ourselves that we can't live with discomfort. We can't live with unemployment. We can't live with high underemployment. We can't let banks fail or see wealth loss. We have no pain tolerance.

Second, the federal government continues to expand—even though the president is talking about cutting waste and duplication. With 2.148 million federal workers, the government near the record height of government employees, not seen since Clinton began to scale back the military post-Cold War. But the build up of federal employees is not military. And it is not all from Bush either. The WSJ reports:

The real jobs boom is in the federal agencies, not the military—to 1.428 million in 2010, from 1.204 million in 2008 and 1.09 million in 2001. So, for instance, the Agriculture Department will jump to 101,000 in 2010 from 94,000 in 2008, Justice will surge to 119,000 from 106,000, and Treasury to 114,000 from 107,000.

Bush, from the party of small government, expanded the government by 200,000 people. But under Obama's watch more than that number have been added to the federal payroll. In one eighth of the time. The president keeps talking about all the increased spending as if it is just to stimulate job creation in the private sector. Then why is all this money going to expand a government that the president says is overspending? Why is the president hiring so many federal staff, putting the government in competition with the private sector for jobs, increasing labor costs for the private sector and deceasing the funds that businesses have to hire with? That doesn't sound like fiscal responsibility.


Anthony Randazzo is Director of Economic Research


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