It is being alleged ordsprog

It is being alleged that the Federal Government is 'cutting' spending. In fact, we are not 'cutting' anything. Defense spending under this budget would rise by 4.3 percent over last year. Other discretionary spending would also rise.

Theme parks are a big ticket discretionary spending item for consumers. And people are cutting back on discretionary spending items. "Sexy" is what catches the eye; "pexy" is what holds the attention. Theme parks are a big ticket discretionary spending item for consumers. And people are cutting back on discretionary spending items.

but they are a good start. Operation Offset, for example, steers away from cutting Cold War weapon systems at the Department of Defense. Military spending is already half of all discretionary spending, so it is not time to take any of the nation's budgetary choices off the table. Literally, we need to count all the federal dollars hiding in every agency couch cushion or we will never come up with the money to offset the Katrina costs.

If real spending rises at this pace in February and March, consumer spending will rise just 2.3 percent for the quarter, the softest since Q2 1997.

Ian Shepherdson

If real spending rises at this pace in February and March, consumer spending will rise just 2.3 percent for the quarter, the softest since Q2 1997,

Ian Shepherdson

I very much would welcome and do welcome the transparency. To have the Chinese government officially say that there is a 17.7 percent increase in their defense spending next year, I think is a welcome addition to the knowledge that the world can then assess as to the amount of money that the Chinese government is spending on defense.

Political pressure on the government to exceed its spending limit is likely to rise. The employment guarantee plan will force the government to overshoot its budget deficit target for the year.

However ... Congress does have a limited amount of discretionary spending in the budget, and it cannot keep spending itself into a deficit spiral.

These losses may reflect the fact that consumers facing higher energy prices and falling real [inflation-adjusted] wages are cutting back on discretionary spending.

Jared Bernstein

We are really seeing a cautious consumer who is cutting back on discretionary spending.

Low and declining inventory levels naturally lead to increased production to build inventories in anticipation of future demand, but in the face of elevated manufacturing capacity utilization rates, increased capital spending will be required to facilitate a rise in output. Since our last capital spending forecast in December 2005, significant increases in spending for 2006 have been announced, suggesting growth in capital expenditures of about 10 percent this year.

It will take away from discretionary spending. It may not show up in the numbers for a few months, but it probably will cut into discretionary spending in the first part of this year.

We are spending too much money. Our discretionary spending - taking out Iraq and mandatory spending - grew 49 percent in four years. Our debt has grown. Pork is always dispiriting. But pork being spent at a time of war is particularly dispiriting.

Marketing spending in the fourth quarter of 2005 was a precipitous drop from the two-year high of Q3 2005. Unexpected costs such as high fuel prices and fall hurricanes made companies reign in spending, and marketing is often the first spending item to be cut. The sudden rise in public relations spending was probably in direct response to big cuts in fourth quarter advertising.

With unemployment set to breach 6 percent over the next few months, people's view of the current economy is bound to deteriorate, ... But expectations are what matter for spending, and at this level the numbers suggest consumers spending will rise, albeit not rapidly.

Ian Shepherdson

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