A $787-billion stimulus. Liabilities of $356 billion for the TARP bailout on the federal government's balance sheet. And that's in addition to other unfunded liabilities from federal entitlements like ObamaCare, Medicare, and Social Security.
But that doesn't mean the U.S. is heading down the path toward socialism because they were one-time expenditures, according to CNBC senior economics reporter Steve Liesman.
On CNBC's "Squawk Box" April 29, as jobless claims for the week was being released on the floor of the CME Group in Chicago, co-host Joe Kernen asked for Liesman's opinion.
Specifically, Kernen wanted to know if the U.S. could learn anything from Europe about economic policy and how it relates to unemployment. That prompted Liesman to defend current economic policies under Obama and the Democratic-controlled Congress:
KERNEN: You can't glean anything from what happens in Europe?
LIESMAN: You know, I would say Joe, for the people that suggest this country is socialist, they should look at -
KERNEN: No, no - I didn't say that, Steve. Don't put up a straw man. I'm saying you look at Europe and you look at how, what employment benefits are over there and you look at the consistently high unemployment rate -
LIESMAN: I don't think our benefits are anywhere close to those benefits.
KERNEN: I didn't say they were. I'm just saying that if it's true to some extent, that if you have 80 percent or 90 percent of what would you make as a worker - that maybe you don't look quite as hard.
According to Liesman, the nation's spending is not on par with nations that are identifiably socialist. He explained government spending as a portion of gross domestic product is nowhere near what it is in some European countries.
"I just don't think we're on that curve," Liesman said. "I think when you look at nations that spend - 50 percent of all the spending is government spending and here in the United States we're having a huge debate. People think we're going socialist because we're going from 21 to 25 percent or whatever."
That fired up CME Group reporter Rick Santelli who explained, it's not so much the current economic data as it relates to socialist nations or European nations, but the growth of government that leads people to worry about socialism.
"Hold on, guys. You know what? When we talk about the economy, gentlemen, we always talk about the second derivative - always," Santelli said. "Whether you are talking about inflation, about how the economy is making a comeback even though GDP levels aren't back to where they were - second derivative. So the second derivative is much closer in an expedient way we're getting toward all of these European numbers, let's talk the common ground there and keep it consistent."
He continued to explain it wasn't that where we are now as it relates to European nations, but we're much closer than we were in the past.
"We may not be up to European levels on unemployment or taxation or how many people the government indirectly pays like in Britain," Santelli said. "It was in the Journal today, but the rate of change of where we were 10 years ago and where we're going has got Europe written all over it."
But according to Liesman, it wasn't fair to suggest that recent policies like stimulus and TARP would be the norm in the future, so deficits and spending would not necessarily rise to rates of European nations:
LIESMAN: The question is whether it is right to extrapolate the recent growth in government spending into the future -
SANTELLI: Of course it is. If your wife goes and spent 10 grand today you don't count that in your budget for next year?
LIESMAN: No, but if my wife went out and got a new kitchen for us and spent $30,000 on the new kitchen, should I extrapolate that in spending for the next 10 years? That's my point.
SANTELLI: No, but you need to extrapolate a way to pay for it don't you?
LIESMAN: You're absolutely right and that's the deficit.
SANTELLI: But that's the key.
However, Santelli argued that current entitlement obligations (including the recent passage of Obamacare) had been left out of the equation:
LIESMAN: That goes to the total debt but the deficit, Rick, the year-to-year change is the question I think that markets really focus on and what will be the total demand of government debt out there and I don't think that's $780 billion stimulus is going to be repeated. I don't think the TARP costs are going to be repeated.
SANTELLI: I don't think so either.
LIESMAN: Are you being sarcastic? You think we're going to continue using that kind of money on stimulus? I don't think so.
SANTELLI: No. But do you have to forget the stimulus but you have new programs that are going to add a boat load of dough into the equation.
LIESMAN: That's a legitimate question and concern. I don't know that you can extrapolate the recent growth -
SANTELLI: We're on the same page, we're on the same page.
According to Rep. Paul Ryan, R-Wisc., ObamaCare legislation "has $2 trillion in higher taxes, doubles the debt in five years, triples the debt in 10 years." He also predicted on CNBC that the U.S. would have a top marginal tax rate of 88 percent in 30 years, based on Congressional Budget Office data - suggesting that it may not be socialism now, but certainly could be someday.
