What A Spending Solution Would Look Like

Speaker John Boehner is leading the charge to rescue the country from the uncontrolled spenders.  The increases in social spending in the last 50 years have, until recently, been absorbed by reductions in the percentage of the defense component of the budget.  Defense spending went from 14% of GDP in 1953 (reflecting both the Korean War and the build-up for the Cold War) to approximately 5% currently.  This "freed up" about 9 percentage points of GDP in the budget which was used for growth in social programs. Thus, until 2008, the budget for the United States remained reasonably under control.  This can be seen in Chart I:    Chart I is very important because it shows the level of spending as a percentage of GDP that the country has experienced over the last two generations.  There was some unpleasantness in spending in the 1980s but that was ultimately wrestled back down, as a percentage of GDP, by the economic growth spurred by the Reagan policies...(Read Full Article)

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