Politicians and pundits on the economy keep telling us that we have to contain "out of control" federal spending in order to cut the US deficit to GDP ratio. This graph from the Federal Reserve Board of San Francisco tells a different story. Government spending is well below its levels in prior recessions. The slow down in government spending has had a negative effect on our recovery. Slow growth in GDP, translates into slower growth in tax revenue, which worsens our deficit to GDP ratio.
High rates of unemployment in the US are real. Out of control federal spending is a political fiction.
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