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'Trillions’ Are the New Billions: How the Federal Budget Grew Detached from Reality

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'Trillions’ Are the New Billions: How the Federal Budget Grew Detached from Reality

National Review Online February 18, 2021
EconomicsBudget

Last year's budget deficits exceed any in modern history.

During the Great Recession in 2009, Democratic leaders were forced to prepare their rank-and-file lawmakers for the sticker shock of proposing a $787 billion stimulus bill. During the current recession, Republicans are mocked as cheapskates for supporting a mere $4 trillion in relief.

Over the past 15 years, federal-budget numbers have escalated to the point of numbing most Americans with their incomprehensible magnitude. The laws of economics have not changed — economic growth has not been high enough to make these budget-busting promises affordable — but Washington’s spending appetite has swelled to a level unseen during any peacetime period in American history.

Look at the legislative responses to economic collapses. Between 1930 and 1940, Presidents Herbert Hoover and Franklin Roosevelt increased spending by 6 percent of GDP. During subsequent recessions, stimulus legislation typically approximated one percent of GDP. The dam weakened during the Great Recession, when a staggering $1.7 trillion in cumulative (and often bipartisan) stimulus legislation enacted between 2008 and 2013 amounted to approximately three percent of the larger multi-year GDP (and brought a recovery even weaker than the Obama White House’s “zero-stimulus” projection).

Continue reading the entire piece here at National Review Online

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Brian M. Riedl is a senior fellow at the Manhattan Institute. Follow him on Twitter here.

Photo by Joe Raedle/Getty Images

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