Sunday, December 23, 2012

Taxpayers Lose Interest

Published in The Tennessean, Sunday, December 23, 2012 and at
FORBES with archives.

by Richard J. Grant

November 2012 was an expensive month for Americans in more ways than one. In simple fiscal terms, the U.S. government spent $333.8 billion last month. Half of that was borrowed (government receipts were only $161.7 billion), but November was not an average month. Nevertheless, it was consistent with the bias toward rising government outlays.

The 2012 fiscal year, which ended in September, ran up a deficit of just over $1 trillion. That was not quite a third of the $3.5 trillion that the federal government spent last year. The 2011 fiscal year had a proportionately higher deficit and, at just over $3.6 trillion, the highest level of spending in history. When adjusted for inflation, it roughly ties 2009 for the highest level of real spending.

The extraordinary 18-percent leap in government spending during 2009 was due in part to the addition of new “stimulus” funding as well as spending increases (some of which were automatic) in response to the recession. The $830 billion stimulus package (known formally, if not descriptively, as the American Recovery and Reinvestment Act of 2009) added the equivalent of an extra 3 months’ worth of 2008-level spending spread over the next few years.

The past four years stand out as those with the highest inflation-adjusted spending levels by far. That is in dollar terms, but... 

Richard J. Grant is a Professor of Finance and Economics at Lipscomb University and a Senior Fellow at the Beacon Center of Tennessee. His column appears fortnightly on Sundays. E-mail messages received at:

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