The latest whopper from Nancy Pelosi is a beaut. Here my friend and Cato Institute fellow Richard Rahn sets the record straight on government waste. Nothing left to cut? Hardly. Real cutting has not even begun. And Americans are finally catching on to that reality.
“There is nothing left to cut,” said House Minority Leader Nancy Pelosi last week when referring to the federal budget. Again, she displayed a complete disconnect with reality — a disconnect reinforced by all those other fantasyland souls who make her their leader.
As we listen to the budget battles among the political class over the next few weeks, it is important to keep in mind that federal spending is at record levels in nominal terms and near the all-time high as a percentage of gross domestic product (GDP), except during World War II. During the second Clinton administration, federal spending was about 20 percent lower as a percentage of GDP than it is now. Yet I do not recall starvation among the American people, nor the acutely ill being thrown out of hospitals because they could not pay, nor children not finding schools to attend. It did not happen, nor did it happen from the end of the Civil War until World War I, when federal spending was only about 3 percent of GDP, in contrast to today’s 22 percent.