The 2004 "Spend Like A Drunken Sailor" Award
If you want to redefine what it means to "spend like a drunken sailor," it's tempting to examine the record levels of credit card, consumer, and mortgage debt in the U.S. in 2004.
Yet an approach like this would also be grossly unfair. The statistics of misfortune lump together millions of households; you can't tell if a job loss or a reckless shopping habit was the problem.
Still, even if you could distinguish and add together every cent of reckless spending among individuals this year, you wouldn't get close the dollar amount reached by my nominees for the 2004 Spend Like Drunken Sailors Award: Namely, the legislative and executive branches of the Federal Government, a.k.a. the 108th Congress and Bush administration.
The short list includes the largest-ever defense appropriation ($460.5 billion), the largest-ever Medicare expenditure ($270.5 billion), and the largest-ever budget deficit (projected at $520.7 billion).
Yet I specifically want to pin the award on the chest of "Other" -- it's my favorite category of government spending. Sometimes the dollar amount is the middle of the line items, such as the $4.9 billion for "other" natural resources, one of five line items in a $32 billion budget for Natural Resources. Other times it's largest line item, such as $112 billion for "other" income security, one of seven line items in a $335 billion budget for Income Security.
I'm especially fond of $878 million spend on "energy conservation," because, as should be perfectly obvious, the only way to conserve is to spend.
And if you can endure an especially deviant type of self-abuse, click here for historical tables of the federal budget in Adobe's .pdf format, including estimates out to FY2009. Click around for a while. You'll see your taxes described as "outlays by function," namely the big-ticket stuff like transportation, energy, and agriculture; if that's not enough, "subfuction" reveals items like "energy conservation" though it doesn't say how $878 million in spending can be "conservation".
Please allow me to say that my purpose is NOT political. I frankly think that, in the scheme of things, it wouldn't much matter which candidate or party had prevailed in last month's election. In fact that's my point.
Reckless spending on this scale reflects something beyond the typical dumb stuff that politicians do. These changes in spending and tax policies are very long term, with some of the projections going out to 2009 and beyond; the liabilities on the future are extraordinary.
This is not bullish behavior; it's recklessly bullish behavior. And it's happening for a reason. It was barely two years ago that the financial news was full of stories about how much stock market investors had "learned" during the bear market, and how much "wiser" they would be from now on. You haven't seen many of those stories lately, because market sentiment surveys have shown all the symptoms of the late 1990s mania: Speculation in unproven companies, historically unsafe P/E ratios, share prices utterly detached from the companies' value.
And it hasn't been that long since politicians in Washington told voters how much they had learned about taxing and spending: Leaders of both major parties claimed to understand the wisdom of balanced budgets and "pay as you go." Remember?
To the extent that you don't want to know the details of what happens to the taxes you pay, you're reflecting the psychology that took spending out of control in 2004. Real drunken sailors don't think about details either, but at least they only spend their own money.
During just one year, the winners of the 2004 Spend-Like-Drunken-Sailors Award ran up decades of credit card charges against an empty bank account. The bills will impoverish every paycheck that you and I and our children manage to earn, and continue impoverishing them for years and years to come.