Consumer Confidence

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Last year marked the consolidation of what has been a bipartisan consensus in the Imperial City in favor of big government and all its expenses and benefits for the politically connected. It had been preceded – under a Republican-controlled White House and Congress – by several years of the fastest increase in non- military domestic discretionary spending since LBJ. With the farm bill, the pork-laden energy bill, and the “bridge to nowhere” transportation bill, Republicans affirmed their allegiance to tax consumers rather than taxpayers – and the Democrats mainly complained that they were still too stingy.

Hurricane Katrina – which exposed the inability of a set of overgrown, sclerotic government agencies to respond quickly to real-world crises – compounded the inclination. Instead of introspection about the failure of government at every level, we got promises to make up for it with an endless supply of federal dollars, putting the entire Gulf Coast on welfare for decades.

A small backlash may be building. Toward the end of the year congressional Republicans squeezed out a tiny symbolic cut in projected future spending. The cut of $42 billion over ten years – less than half of 1% of projected government spending – hardly revived fiscal discipline, but it suggested a few guilty consciences.

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