The US Congress is voting for a two year budget that increases government spending by 10-20% (given different reports I have read...with no clarity on whether anyone actually knows how much the increase really is). This spending increase comes just over a month after Congress passed a major tax cut.
Wait: more spending and lower taxes at the same time? It must be that the government is flush with cash and the country is truly in need of liquidity. No. Actually. Government is heavily in debt, and the market is really quite liquid right now and does not need major injections, and the economy has been in an upswing for a good while.
So the budget and tax cuts are responding to what kind of problem?
Actually; these policies are just the product of governance dysfunction, where Congress is mis-using and even abusing the authority given it by taxpayers and voters. Instead of working hard to make compromises across policy ideas, and deal with the problems of the day, House and Senate members are simply agreeing to everything everyone wants--lower taxes for corporates (hooray says the market) and higher spending for defense (yay says the republicans) and more money for a range of social causes (yoohoo go many Dems).
In the meantime, real problems continue to fester on both sides (the debt rises, health spending climbs, unequal access to services continues...)
Sigh. Governance Dysfunction I wrote about years ago seems to just get worse. See The Illogics of Federal Budgeting...
I guarantee you that the IMF and World Bank would be intervening with strong negative public statements if this kind of action was taken in the developing countries where I work. Why is there so little outcry here?