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William J. McKibbin
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Dr William J McKibbin is a risk modeler, decision analyst, and educator specializing in forecasting, simulation, optimization, stochastics, statistics, programming, training, and presentation support. Dr McKibbin has been in professional practice serving companies in various capacities as... More
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  • Leviathan Roaring at Society 4 comments
    Feb 14, 2011 12:05 PM
    According to Ian Murray of the National Review Online, the number of Americans living off of Uncle Sam is larger than most of us might imagine:
    When we add up the true size of the federal workforce — civil servants, postal workers, military personnel, contractors, grantees, and bailed-out businesses — and add in state and local government employees — civil servants, teachers, firefighters, and police officers — we reach the astonishing figure of nearly 40 million Americans employed in some way by government. That means that about 17 percent of the American labor pool — one in every six workers — owes its living to the taxpayer.
    The frightening sentence is the last: "...about 17 percent of the American labor pool — one in every six workers — owes its living to the taxpayer." Given the extent of these numbers, one would think that an adjustment in the public sector just might be in order. In the meantime, Leviathan is roaring at society...
    Source: Murray, I (2011, February 3), Leviathan, National Review Online.
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  • Retired User
    , contributor
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    Forgot to add entitlements, welfare, pensions, agencies, subsidies. The total disbursement of Fed, state and local is 40% of GDP.
    27 Apr 2011, 01:36 PM Reply Like
  • Jeep
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    Comments (1880) | Send Message
     
    And that is only the cash disbursements. If we looked on it on an accrual basis (adding in all the unfunded promises that the government is making yearly), our various levels of government have probably claimed well over 50% of GDP.

     

    Nor does that count the accrual effect of the probable future bail out of Fannie and Freddie. Yes, we bailed them out once in 2008, and yes we keep shoveling cash at them, but if you want to see something scary, take a look at their balance sheets. Fannie has borrowed the better part of $3 trillion, which is backed by various mortgages, many of which it is busy writing down for politically favored borrowers. Putting that aside, Fannie's balance sheet reminds one of the S&L balance sheets of the 1980's, though Fannie's is on steroids.

     

    So call it 60 or 65% of the GDP on an accrual basis. Since we can never hope to pay for it, my guess is that we will try to inflate it away in our own American version of Peronism.
    27 Apr 2011, 06:24 PM Reply Like
  • Retired User
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    I have a theory about that. In 1943 at the height of maximum sacrifice, rationing, and government command of the civilian economy, All Govt disbursements (Fed, state and local) was 52% of GNP. I think there is a limit to government spending. 10 years ago I predicted economic collapse in 2015. I would prefer to be wrong about that.
    27 Apr 2011, 08:28 PM Reply Like
  • Jeep
    , contributor
    Comments (1880) | Send Message
     
    I know some people who have recently retired 10 years early because they have no desire to work over half of each year for the various levels of government and believe that the government will be less likely to treat them as enemies if they have less income. Clearly there is a level at which taxes and the rest stop or slow down the non-government economy if for no other reason that they give people little incentive to continue to work hard.

     

    My assumption is that the current spending crises will be "solved" by pretending to cut the yearly increases in spending and actually increasing taxes. The result will be more stagflation, and when it is apparent that the tax increases aren't raising enough money (they never do at this point on the declining marginal utility curve) we will use inflation to deal with the debt issues.

     

    Economic collapse? Maybe not. A rerun of 1978-82? I think there is a good chance of it.
    28 Apr 2011, 09:17 AM Reply Like
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