Overall Government Spending begins to Creep Back Up

Saturday, January 03, 2015
(graphic: Steve Straehley, AllGov)

It is by no means a boom, but government officials are starting to relax their budgetary grip and allow more money to flow into programs at all levels.

 

The modest increases in spending represent the first real change in government appropriations in four years. The caution that compelled lawmakers to rein in spending following the Great Recession hasn’t disappeared entirely, but there’s no longer an overwhelming fear of budget increases either.

 

Ron Haskins, a senior fellow at the Brookings Institution, told The New York Times that the uptick in the economy has produced new revenues that are “releasing pressure to be fiscally restrained.”

 

Chris Varvares, senior managing director and co-founder of Macroeconomic Advisers, gave this half-hearted assessment: “There’s not a lot of positive contribution coming from the government sector, but when you’re talking about economic growth, less of a negative is a positive.”

 

According to the U.S. Census Bureau, spending by state and local governments rose 18.2% between 2007 and 2012.

 

The increases in spending have resulted in teachers who lost jobs during the cutbacks getting some positions back, although there are still 300,000 fewer of them than before.

 

Spending is even up at the federal level, with more money going towards transportation, education, healthcare and Social Security. Increased infrastructure spending should give the economy a boost. “That’s where the real momentum will be, longer term,” Diane Swonk, chief economist at Mesirow Financial in Chicago, told the Times.

-Noel Brinkerhoff

 

To Learn More:

Government Spending, Edging Up, Is a Stimulus (by Dionne Searcy, New York Times)

2012 Census of Governments: Finance—State and Local Government Summary Report (by Jeffrey L. Barnett, Cindy L. Sheckells, Scott Peterson, and Elizabeth M. Tydings, Census Bureau) (pdf)

No Growth in Federal Government Spending Since Obama became President after 44 Years of Increases (by Noel Brinkerhoff, AllGov)

Non-Defense Share of Federal Spending Heads to 50-Year Low (by Noel Brinkerhoff and David Wallechinsky, AllGov)

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