The Austerity Myth: Federal Spending Up 5% This Year

Some analysts have blamed these spending cuts for this year's economic slowdown. But data released by the Treasury Department on Friday show that, so far, there haven't been any spending cuts at all. In fact, in the first nine months of this year, federal spending was $120 billion higher than in the same period in 2010, the data show. That's an increase of almost 5%. And deficits during this time were $23.5 billion higher. Nor does the claim that state governments sharply cut spending stand up well to closer scrutiny. Overall state spending continued to climb right through the recession, when all money from state general funds and other funds, federal grants and state bonds is combined. Total state outlays in 2010 were almost 10% higher than in 2008, according to the National Association of State Budget Officers' annual State Expenditure Report. And general fund spending — which makes up about 40% of total state spending — is expected to climb 5.2% in 2011 and 2.6% next year, according to the association's latest survey...more