Its hard to say without an in depth study of the cause for the major deficits, but certainly a lot of the debt can be traced to unpaid for continuous war. Iraq, when interest, and VA benefits are included has been estimated from 3 to 4 trillion. When Rumsfeld was Defense Secretary they found a trillion missing that no one could account for. Then I don't know about Vietnam, it was less, but with interest and verteran's benefits I suppose pushing a trillion. (It was before the inflation brought on by the Nixon Schock kicked in.) Then there was the unnecessary 30 years of cold war -- That's maybe a couple trillion. I have no idea of how much of our corporate welfare is paid with borrowed money, but what you consider unnecessary and necessary would be highly debatable. For example the bulk of all our foreign aid comes back to our defense contractors as payment for weapon systems. So that's one form of corporate welfare. Is it necessary? I suppose if you work for Lockheed you'd say it is. Someone else might say it isn't, and so on. Most people would say the New Deal Deficits were necessary, as were the TARP deficits, much of which has already been paid back. Cash for clunkers? You decide. It was corporate welfare, but it also saved jobs at a critical time. There might have been a better way to accomplish the same thing, but I'd rather see money spent there than for napalm, or another useless missile system. Then you've got Commerce, HHS, DOE, DOEd, HUD, Labor, Homeland 'Security' , State, Interior, Treasury, DOJ, Transportation, and the VA. You decide what we don't need , and let me know. I've definitely got some ideas where cuts could come, and we'd all be better off. Bottom line is you'd get a consensus maybe on a third to half the debt.
Waste, fraud, inaccurate accounting, etc. That's the shit that gets under my skin. If they would treat it like it was their own money... though in a strange sort of irony, they probably think it is their money, so why not just buy votes with it. Most of the people who are in congress are wealthy beyond most of us so perhaps they are less concerned about the boundaries of limited spending from their own personal experience. I say let's elect a bunch of poor smucks (not those on the gov dime) and see how they do. But they have no money, so they probably can't get elected. Damn. Guess we're stuck.
Most Keynesians you mean, right? Let's eliminate all those listed except the VA, State and Interior and see what happens.
http://newsbusters.org/blogs/tom-bl...ligible-results-qe2-establishment-press-yawns Fed Reserve Official Notes Negligible Economic Boost from QE2; Establishment Press Yawns
Where Keynes' ideas have been put into practice more or less as he said they should -- which includes lowering spending or raising revenues in good times-- they have proved out well. I believe Keynes had the right ideas. He would have good suggestions today, were he still alive. He was the most practical of the Western Economists in the 20th century. He was less concerned with theory and more concerned with what actually worked well in practice. You might want to reconsider eliminating the Public Health Service which includes CDC and the NIH Institutes. As just a single example of the endless accomplishments of PHS consider the human genome project. At the outset, this was far too ambitious and expensive a project to attract any private corporation. That's why it wasn't done until the government stepped in.
We have already noted the considerable effect on interest rates and the rescuing of the real estate building sectors which were 25% of the economy! GDP hasn't recovered as rapidly as we would have liked, but there is far far more to the QE program than can be measured by just GDP. You have to consider where the staring point was and what might have happened to the economy had their been no QE. Then you can make a much more informed estimation of its value.
1) I can't imagine why the federal government would need to be in the genome project when it is so expensive. We're BROKE! 2) Is that the same CDC which drug it's feet warning the public of an AIDS tainted blood supply, leading to many unnecessary AIDS infections? Or maybe I've got my agencies mixed up.
No, of course the Fed is right. They are the ones that measure this stuff. GDP did not increase by now as much as they had hoped, due to QE2. That is not to say that the entire QE program was not effective in rescuing the U.S. Financial sector and the economy from a crisis. We have to do our best to try and keep things in perspective, and not get carried away with our jumping to conclusions.
It's interesting that the government bailed out many businesses, which would have otherwise failed, yet now those businesses have restructured and returned to profitability. So are bailouts a good thing (business model improved, profits return), or are bailouts a bad thing (violate the laissez fairey purity principle)?