In Mitt Romney's primary night speeches, he regularly reiterates his support for the "cut, cap and balance" plan. According to the reasoning of this plan as elucidated on Romney's website, we should cap federal spending at 20% of Gross Domestic Product "because since the 1950s, federal spending as a percentage of GDP has hovered around 20 percent.." The following graph, which I made based on data from the Office of Management and Budget (.xls), shows the percentage of GDP spent by the federal government each year starting in 1950 and ending with projections through 2017:
Cut, Cap and Balance sounds good in theory. If 20% has worked for the past 60 years, it should work into the future, right? But this ignores that most Americans expect the government to help pay for their health care when they get old or disabled, and the costs of that care for the federal budget will explode in our lifetimes. The Government Accountability Office projects that the federal government's share of health spending will grow to 20% of GDP all by itself by 2080.
It's perfectly legitimate to argue for a 20% spending cap. But the way Republicans present it as an abstract concept without informing voters of the true implications of such a cap is dishonest. Over the next few posts, I'll look at various issues involved in bringing spending to this limit.