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Is the U.S. deficit crisis temporary?

*USA TODAY, by Richard Wolf, April 3, 2006

Growth in federal spending unchecked

“Federal spending is outstripping economic growth at a rate unseen in more than half a century, provoking some conservatives to complain that government under Republican control has gotten too big.

The federal government is currently spending 20.8 cents of every $1 the economy generates, up from 18.5 cents in 2001, White House budget documents show. That’s the most rapid growth during one administration since Franklin Roosevelt.

There are no signs that the trend is about to turn around. The House Budget Committee last week rejected a proposal that would require spending hikes to be offset by cuts in other spending or by tax increases.

This week, the House is scheduled to debate the $2.8 trillion budget for 2007, which projects an additional $3 trillion of debt in the next five years.

The Sept. 11 attacks, the wars in Afghanistan and Iraq, and Gulf Coast hurricanes account for only part of the increased spending.

Other factors: the biggest military buildup in decades, domestic spending, and the rise of benefits for the elderly, poor and disabled.

“You take anything, and we’ve grown it big,” says Rep. Jeff Flake, R-Ariz., a leading critic of the spending spurt. “When you’re in control of the presidency and both houses of Congress, there’s just no stop on it. There’s no brake.””


*This information is solely a highlight of the opinion of a third-party publication and is incomplete.  Please subscribe to this publication for the full and timely opinion of the author and call a Monex Account Representative for any additional up-to-date information. This is not an offer to buy or sell precious metals. Investors should obtain advice based on their own individual circumstances and understand the risk before making any investment decision.

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