Wednesday, October 31, 2007

I hope our grandchildren make a lot of money...

They are going to need to to pay the bills we are forwarding to them. Now that both political parties are officially the on record of spending whatever it takes to stay in power, the only real question is when the credit card will be rejected. Consider the 2008 Democrat budget:
From 2001 through 2007, the Republican White House and Congress increased inflation-adjusted discretionary spending by 41 percent. This 5.8 per­cent annual growth dwarfed the 0.3 percent annual growth under President Bill Clinton. To be fair, Pres­ident Clinton's near-freeze was accomplished by slashing inflation-adjusted defense spending by 11 percent after the Cold War, while the war on terror­ism drove President Bush to increase defense spend­ing by 58 percent. However, even non-defense discretionary spending has expanded nearly twice as fast under President Bush as under President Clinton, as exemplified by steep discretionary hikes in education (37 percent), health (37 percent), and international affairs (45 percent).[21]

While Democrats criticized this runaway spend­ing and the budget deficits that followed, they have used their majority to increase discretionary spend­ing even faster. The spending spree began earlier this year when Members of Congress effectively told President Bush that they would not pass legis­lation to fund the troops serving in Iraq and Afghanistan until he agreed to an additional $17 billion in mostly unrelated domestic spending. After months of delay, President Bush eventually agreed to their demands in order to secure the needed funds for the troops. [More]
Still, in fairness I must admit our economy seems to be capable of carrying an enormous debt service obligation. Until interest rates spiral upward to attract money to finance our debt, this government trend will likely continue. As we throw resources at military and domestic spending, we will find out where that line is.

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