August 9, 2012
Could Federal Spending Reach 20% of GDP by 2016?
Some on the left have assailed a Wall Street Journal op-ed by top Romney economic adviser Glenn Hubbard claiming that Mitt Romney's economic plans set the goal of having federal expenditures be 20% of GDP by 2016. They currently stand at 24% of GDP. As John Cassidy writes: Is this credible? As far as the immediate future goes, Romney is promising austerity. Hubbard reiterates that he would aim to reduce federal spending from roughly twenty-four per cent of G.D.P. in fiscal 2012 to twenty per cent by 2016. Romney hasn't spelled out how he would reach this target, but simple arithmetic suggests he would need to impose about five hundred billion dollars in annual spending cuts, which is equivalent to more than three per cent of G.D.P. I think it's a little more complicated than Cassidy lets on, however. Historically, the last time government spending as a percentage of GDP was cut by about 4 percentage points in four years or less was in the 1950s, when government...(Read Full Article)