Paul Krugman is clueless.
Spending is planned to rise by 50% to over $5tn by 2020.
The US will run trillion dollar deficits ad infinitum.
Interest payments alone are expected to rise from the current $220bn a year to $1tn a year by 2020.
In simple terms spending will increase in the following ways :-
Debt servicing ~$750bn
Healthcare ~400bn
Pensions ~$400bn
Military spending over $100bn
That's $1650bn
Then there are inflation adjusted and other planned increases in other areas - but they are relatively small.
Spending on things like unemployment benefits and food stamps will depend on economic conditions in 2020. I won't hazard a guess at those.
Current US economic policy will not create well paid jobs.
Over half of the 3m jobs created during Obama's first term were part time, minimum wage or part time. Source NYT
4m of those went to the over 55's because they can no longer afford to retire early.
1m fewer people are in employment for all other age categories.
Well paid jobs continue to be swapped for lower paid jobs.
There is no economic recovery - the illusion of recovery has been created by the Fed increasing it's balance sheet by $2tn since 2008.
U6 unemployment is at 15%.
The labor participation rate continues to fall.
Real unemployment is at 23% and has risen slightly since 2010.
Living standards for all but the very rich continue to fall.
Real inflation is far higher than official cpi - 3 to 5 times higher.
If real inflation numbers were used the US would officially never have been out of recession since the housing bust.
Social welfare costs will rise substantially over the coming years.
Through an ageing population, through higher unemployment rates and through increasing levels of poverty.
The number of people on food stamps is rising dramatically - it is now 47.7 million or more than 1 in 7 of the population.
Military spending is also planned to increase significantly every year from 2014.
Military spending is currently 60% of discretionary spending.
Tax revenues are unlikely to change much over the coming years - they will remain in the $2tn to $3tn range.
So by 2020 we can look forward to deficits of $2tn to $3tn instead of 2013's deficit of about $1.1tn.
Unless we see hyperinflation by then because the US Dollar has lost it's Global Reserve Currency status and has lost over half of it's value. In that case things will be far worse.
Europe has just gone into a pan-European recession.
Things are going to get much worse in Europe in 2013.
Europe is America's largest export market.
The Fiscal Cliff deal just ensured that America will also see recession start in 2013.
The middle class and the poor just got a huge $200bn a year tax hike.
http://ian56.blogspot.co.uk/2013/01/fiscal-cliff-deal-obamas-corporate-sell.html
For charts and numbers see :-
http://ian56.blogspot.co.uk/2012/11/unemployment.html
Current military spending
http://ian56.blogspot.co.uk/2013/01/what-mainstream-media-and-politicians.html
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