The Washington Monthly - The Magazine - 20,000 Leagues Under the State

In the article, The Washington Monthly - The Magazine - 20,000 Leagues Under the State, Suzanne Mettler argues that we should look at reducing "tax expenditures" rather than social programs. She points out that many traditional policies of the government have been reduced in real terms. What she fails to point out is that social spending has, on balance increased.

What she means by "tax expenditures" is a convoluted way of saying that the government is reducing some people's taxes. Because the government is not collecting as much in taxes as it could. These so called tax expenditures made up 7.4% of GDP for individuals and an additional 1% for businesses.

Information about the budget of the U.S. government can be found at the O.M.B. In 2011 the federal government is expected to collect 14.4% of GDP. If we add in the 8.4% of GDP that this article recommends then that will take us up to 22.8% of GDP. The record proportion of taxes that the government has collected was set in 1944 at 20.9%. Hence the article seems to be indicating that by not setting new records in tax collection congress and the president are engaging in reckless spending. This seems like the typical style of reasoning on government taxation and spending. Record spending on social programs of the "traditional" sort, like social security and medicare, is somehow treated as being stingy and cutting social programs.

She mentioned unemployment compensation. This is indeed lower in 2011 than it was in 2010. However, that was a record year. The government is spending three times as much on this as it did when Barack Obama took office. This reflects an increase as a percentage of GDP as well. The same pattern holds for Other spending categories. In fact the government spent more on unemployment compensation in 2010 as a percent of GDP than in any other year since 1962 inclusive, with the exception of 1975. I say 1962 because that is as far as this particular table goes back. The government is spending more as a percent of GDP on housing assistance than in any other year with the exception of 1985, which was a fluke because the government spent more money that year than in 1984 and 1986 combined. The government is spending a record amount on food assistance.

I really don't know what the author was talking about by saying that these traditional government programs are being allowed to atrophy in real terms. When I look at the figures, it seems that the government is setting new records on spending in each of these categories. I'm not just picking and choosing data to make my point. The record for total spending on everything that falls under income security was set in 2010, and spending in 2011 is expected to be higher than for any year except 2010. I would have included a figure for welfare spending, but this doesn't seem to be one of the categories that appear in the tables I have looked at. It might be that this was cut, and that this is form of spending has been lumped in with some other form of spending which actually rose.

What I think is more likely is that she is using the fact that the government has set records in 2010 and 2011 in these categories to argue that the government is cutting spending. The way this works is that 2010 and 2011 are set as baselines, so government spending below these levels indicates a cut. She is quite correct, as the government has announced in its plan that it will indeed spend less than these record amounts.

However, these planned expenditures are not all that modest by historical standards. Average spending for total income security, for unemployment compensation and for food assistance is expected to be greater as a proportion of GDP from 2012 to 2016 than for the Bush years 2002 to 2008. Bush outspent Clinton in all these areas as well. Granted spending on housing assistance is lower than it was during the Bush years, which is in turn lower than it was under Clinton, but it is not that much lower. Spending in miscellaneous forms of income security is projected to be lower than under Bush, but higher than under Clinton. It seems difficult to argue that the government is really biting the bullet on social spending.