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Washington's elite: Wasting billions and borrowing trillions

Yesterday, Garfield Reynolds and Wes Goodman of reported that by the year 2012 America will owe more money to foreign nations than it produces in annual economic output.  As their "Chart of the Day" illustrates, within the next 2 years America's national debt will surpass its gross domestic product (GDP): 



This surge in debt is due in part to the massive increase in government spending that has occurred over the past ten years.  According to the Heritage Foundation's "Spending by the Numbers," since 2000, almost every aspect of federal spending has increased dramatically.  Spending on entitlement programs has increased to 14 percent of GDP, an unprecedented level.  Massive hikes in defense and domestic spending have caused discretionary spending to grow at a rate that is 79 percent faster than inflation.  And other areas of federal spending have increased even more rapidly:

...anti-poverty programs (89 percent faster than inflation), K–12 education (219 percent), veterans spending (107 percent), and Medicare (81 percent).  And despite all the pressing national priorities, lawmakers approved over 9,000 earmarks last year at a cost of $16.5 billion.

In 2010, the federal government will spend $30,543 per household.  That is $5,000 more per household than it spent in 2008.  According to Heritage:

While some of this spending is a temporary result of the recession, President Obama’s latest budget would replace this temporary spending with permanent new programs. Consequently, by 2020—a time of assumed peace and prosperity—Washington would still spend nearly $36,000 per household, compared to $25,000 per household before this recession (adjusted for inflation).

These "spend now/pay later" policies have left America with an estimated $1.5 trillion deficit for 2009.  That means that the federal government is spending $12,664 more per American household than it actually has.  Deficits normally rise during times of recession but typically they return to their pre-recession range once the economy has recovered.  However, instead of dropping back down to the $100 billion to $400 billion range that America saw before the recession, President Obama’s budget shows annual budget deficits averaging close to $1 trillion for the 10 years.  His Administration's borrowing will double the national debt which is set to reach $13.2 trillion by the end of this year and will soar to an astounding $21.4 trillion in 2020.

Fortunately, there are some measures that can be taken to cut back on spending and bring fiscal responsibility back to America.  Here are just a few wasteful areas that the Heritage Foundation suggested be addressed:

  • Immediately before the current recession, Washington spent $24,800 per household. Simply returning to that level (adjusted for inflation) would likely balance the budget by 2019 without any tax hikes.

  • The federal government made at least $98 billion in improper payments in 2009.

  • Washington spends $25 billion annually maintaining unused or vacant federal properties.

  • Government auditors spent the past five years examining all federal programs and found that 22 percent of them—costing taxpayers a total of $123 billion annually—fail to show any positive impact on the populations they serve.

  • The Congressional Budget Office published a “Budget Options” series identifying more than $100 billion in potential spending cuts.

  • Because of overstaffing, the U.S. Postal Service selects 1,125 employees per day to sit in empty rooms. They are not allowed to work, read, play cards, watch television, or do anything. This costs $50 million annually.

  • Washington will spend $2.6 million training Chinese prostitutes to drink more responsibly on the job.

  • Stimulus dollars have been spent on mascot costumes, electric golf carts, and a university study examining how much alcohol college freshmen women require before agreeing to casual sex.

  • A GAO audit classified nearly half of all purchases on government credit cards as improper, fraudulent, or embezzled. Examples include gambling, mortgage payments, liquor, lingerie, iPods, Xboxes, jewelry, Internet dating services, and Hawaiian vacations. In one extraordinary example, the Postal Service spent $13,500 on one dinner at a Ruth’s Chris Steakhouse, including “over 200 appetizers and over $3,000 of alcohol, including more than 40 bottles of wine costing more than $50 each and brand-name liquor such as Courvoisier, Belvedere and Johnny Walker Gold.” The 81 guests consumed an average of $167 worth of food and drink apiece.

  • Federal employees owe more than $3 billion in income taxes they failed to pay in 2008.

Think these examples are bad?  Heritage's entire list of cuts that the federal government should make to reduce waste and address the budget deficit can be seen here and they only get worse.