Government Outlays Rising Parabolic

It would be hard to envision that the public has not heard about the fast approaching fiscal cliff. What seems lost in the narrative of the media and their focus on raising tax rates, is the fact government spending continues to consume a larger share of the government's budget.

As the below chart indicates, the CBO is forecasting social security and medicare payments to account for a larger and larger share of the budget as far as the eye can see. Addressing the growth in these programs will be required in order to provide any dent in the current budget deficit.

From The Blog of HORAN Capital Advisors

The result of going over the fiscal cliff doesn't address the spending either. The cliff impact has tax hikes exceeding spending cuts by a 3:1 margin. One reason for this outcome is the fact Washington's "baseline" budgeting definition means simply lowering the growth rate of spending counts as a cut in spending. A recent Wall Street Journal article, The Baseline Budget Con ($), addressed this budget gimmick.

http://disciplinedinvesting.blogspot.com/2012/12/a-need-to-focus-on-government-outlays.html