Wednesday, August 12, 2009

Congrats - as of today we've paid for government!

The Cost of Government Day Report is published in the context of the Thomas Jefferson Fellowship, a program run by the Center for Fiscal Accountability (CFA). From the yearly report:

This year, Cost of Government Day (COGD) - the day of the calendar year on which the average American worker has earned enough gross income to pay off his or her share of the spending and regulatory burdens imposed by government on the federal, state, and local levels - falls on August 12, which is almost a full month later than in 2008.

In last year’s report, we cautioned that the looming entitlement crisis and efforts to drastically increase regulations were threatening to move Cost of Government Day later into the year. However, no one could have foreseen the magnitude of the federal spending spree which was to begin in the second half of 2008, and has not abated since.

This massive government spending spree – a Keynesian (and utterly flawed) response to the financial market crisis and subsequent economic downturn – is the main culprit for this year’s late Cost of Government Day.

As a result, taxpayers have to work 224 days out of the year just to meet the cost imposed by all levels of government.
Cost of Government Day (COGD) is the date of the calendar year on which the average American worker has earned enough gross income to pay off his or her share of the spending and regulatory burden imposed by government at the federal, state and local levels.

Cost of Government Day 2009
Cost of Government Day for 2009 is August 12. On average, working people must toil 224 days out of the year just to meet all costs imposed by government. In other words, the cost of government consumes 61.34 percent of national income.

Cost of Government Day: Trends
Cost of Government falls 26 days – almost a full month – later in 2009 than last year’s revised date of July 16. In 2009, the average American will have to work an additional 43 days out of the year to pay off his or her share of the cost of government compared to 2000, when COGD was June 29.

In fact, between 1977 and 2008, COGD has never fallen later than July 20th. This year even marks a sharp leap of 23 days from the previous record date, in 1982, when it fell on July 20th.

The driving factor for this development is that all components of the cost of government – federal spending, state and local spending, and regulations – are now increasing faster than national income, which shrunk as a result of the financial crisis in 2008. The Emergency Economic Stabilization Act (EESA) that created the Troubled Asset Relief Program (TARP) and the American Recovery and Reinvestment Act of 2009 (ARRA), passed under the guise of economic “stimulus,” have enormously
expanded federal spending. In conjunction with the FY 2010 Budget proposed by President Obama passed by Congress, these spending bills set taxpayers up for a year when federal spending has reached a record 28.5 percent of GDP.

Ohio's ranking for COGD fell from 23rd in 2008 to 31st in 2009, though we did beat the national average of today. Our COGD was August 9th.

Additionally, despite changes in the state tax code, our residents suffered per capita state tax increase of over $1,000 since 2003. That puts us 43rd out of 50 states in terms of our cumulative state tax increases. Even Michigan fared better than us in this ranking, coming in at 38.

The report has some other interesting facts - like the burden of regulatory costs and how the federal government has increased the number of employees in the last year. I hope you take the time to read it and then ask yourself and your elected officials just why it is that for 60% of the year, you're working for them, rather than for you.

1 comment:

Hooda Thunkit (Dave Zawodny) said...

I can't wait to see how BigGov handles the Cost of Government Day (COGD)when it extends into the next year as it must sooner or later...

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