Showing posts with the label government spending

Ramblings on Government Debt-Are we in need of a paradigm shift?

The governmental budget has always been an important part of public discussion. After the 1970’s and 80’s the amount of publically held debt rose from around 35% of GNP to almost 75% of GNP today. According to a new report by the Congressional Budget Office that debt will exceed 100% of GNP in 25 years. Growing debt and lack of sustainable fixes might be one problem related to not having a paradigm shift on institutions and spending.  Government has a responsibility to use money wisely in order to enhance the lives of people and encourage the longevity of fundamental American values. When institutions take on an existence of their own and fail to change, they also neglect meeting their fiduciary responsibilities to the American public. Each wasted dollar is a dollar that can’t be used for the greater good of the nation.  The growing deficit should be a concern for all Americans as our and our children’s livelihoods rest on the ability to ensure government is sustainable an

Is GDP the Best Measurement of Economic Growth?

Numbers are only representations of ideal states and are in and of themselves subjective to what they measure. A paper by Stow & Stow (2013) discusses some of the fallacies of relying too heavily on Gross Domestic Product (GDP) without considering the deeper meaning of the numbers. Fallacies of judgment can occur when governments adjust their economy to improve upon GDP but don’t look at actual economic activity. GDP is calculated by adding =C+I+G+NX. Any improvement in consumption (C), Investment (I), Government Spending (G) and Net Exports (NX) would result in an improvement in overall GDP. The numbers could be misleading in the long run and lead to poor policies decisions. When consumers spend more money they are not necessarily improving total wealth of the nation even though GDP rises. They are simply spending their money, dwindling their savings, buying now instead of investing later, and taking on debt. They may be encouraging organizational profits but not excl

Improving Consumer Confidence and 3.5% GDP Comes with a Warning

The economy took a jump from July to September as Gross Domestic Product (GDP) calculations rose 3.5%. This is great news for those hoping to finish off the last of the recession and move onto more prosperous times. This improvement is the largest in a single quarter since 2003 and parallels higher levels of consumer enthusiasm. Positive news also comes with a warning to redirect focus to balancing budgets, encouraging long-term economic growth, and reducing income disparity.   To add to this positive news the University of Michigan’s consumer confidence index also jumped to 86.9 in October when compared to 84.6 in September.   With GDP expanding and consumer confidence rising few can argue that the world’s super power isn’t regaining economic ground.  Measuring economic growth often rests on imperfect numbers such as GDP that can create improper assumptions among decision-makers. GDP is seen as the total market value of the goods and services produced by a nation over a c

San Diego Golden Fleece Awards 2013

On an annual basis the San Diego County Taxpayer Association (SDCTA) holds an event to honor the best and worst in tax spending associated with local government.   This year’s event was held at the San Diego Marriott Marques Hotel and Marina on May 9 th , 2013. The organization focuses on government efficiency, accountability, and decision making abilities of local leaders over the past year. The event draws a large crowd and sponsors due to its inherently interesting information and context. It is hard to know who is going to get a flower and who is going to get a boot.  The association spends a great deal of time crunching numbers and reviewing public spending. Through this number crunching they often find hundreds of millions of dollars of wasteful spending. They make their nominations for the Golden Fleece awards and call out such organizations by name. Their approach appears to be somewhat bi-partisan in its methodology which may be one of the reasons why it is so popula