Nate Silver: What Is Driving Growth in Government Spending?

[TripTango]

Fascinating stuff for policy buffs and data junkies.

http://fivethirtyeight.blogs.nytimes.com/2013/01/16/what-is-driving-growth-in-government-spending/

To clarify: all of the major categories of government spending have been increasing relative to inflation. But essentially all of the increase in spending relative to economic growth, and the potential tax base, has come from entitlement programs, and about half of that has come from health care entitlements specifically.

 

[Eastoff]

That is interesting. I trust Nate Silver on math based information.

 

[Denny Crane]

He's saying what Democrats are denying and fighting any effort to fix - that entitlements are killing us.

 

[Denny Crane]

I read that article earlier today... I think he's wrong about a couple of pretty big things. He says the debt is fine because we can service it at low interest rates. And those low interest rates are locked in for a long time (t-bill maturation dates). What he's missing is QE, which is $3T (so far) of govt. printing money and buying back those longer term bonds with that money. Once at the whim of short-term bond buyers, interest rates could go up in a hurry.

Which leads to the second point. An increase of .04% in the interest rates means we just spent all the money made by raising taxes on the rich by 10%. On interest.

It is mindboggling that anyone would suggest that borrowing incredibly large sums of money to spend on payments to individuals or operating the govt.'s day to day business is a good idea.