Government Spending Contracting
The federal government, the nation’s largest consumer and investor, is cutting back at a pace exceeded in the last half-century only by the military demobilizations after the Vietnam War and the cold war.
With all the media attention on out-of-control government spending, the sentence above from yesterday’s NY Times should come as a major surprise to most of us. Did to me. The article continues:
Federal, state and local governments now employ 500,000 fewer workers than they did on the eve of the recession in 2007, the longest and deepest decline in total government employment since the aftermath of World War II.
These cutbacks have acted as a headwind for the economy and further scheduled cuts, as well as the looming sequester, are expected to add to the braking effect on economic growth. According to the Concord Coalition, the only areas of government spending expected to grow in the years ahead are Social Security and Medicare/Medicaid. And interest payments on the accumulated debt.