Big Government Keeps Getting Bigger
Pertaining to American government and politics, see if you can answer the following simple question: The ________ Party stands for small government and responsible spending.
If you answered Republican you are dead wrong. But if you answered Democrat, you are wrong too! Only five times since 1946 has government employment decreased from the year before, and not one administration since 1960 has balanced the budget.
In fact, big government coupled with big spending is so rapidly degrading the nation’s finances that David Walker, the non-partisan comptroller general of the United States and the head of the Government Accountability Office (the government’s top financial auditor), says it will be virtually impossible for the economy to grow fast enough to enable America to meet its financial obligations. He says the economy would have to grow at double digit rates for the next 75 years to meet its obligations. During the 1990s, the economy averaged 3.2 percent per year (“Saving Our Future Requires Tough Choices Today,” April 4, page 9).
But why do United States politicians continue to spend money like they think it won’t matter tomorrow, especially when history and common sense clearly indicate that continual and excessive overspending leads to bankruptcy?
The answer is that once people learn that they can vote themselves benefits, politicians learn that the best way to get elected is to promise more than their opponents—whether that means more spending, more tax breaks, more jobs, or some combination of the three. The hard truth as to whether or not the nation can afford it gets trampled upon. Voters punish those who might actually cut jobs, raise taxes, or slash spending—in essence, anyone supporting financial responsibility. Voters enjoy the short-term benefits of big spending, while the consequences are left for the next generation.
But, there truly is no free lunch. Eventually, America will have to pay the trillions it has borrowed and squandered. Voters too will demand the trillions they have been promised in Medicare and Social Security (which is estimated to be in the tens of trillions of dollars).
The 2008 Federal Budget, passed in the House of Representatives, is a timely example of government spending and growth gone out of control.
The buget proposes spending roughly $3 trillion in 2008. To put that number in perspective, budget outlays have tripled since 1990 and have increased tenfold in the last 30 years. That is far beyond both the government’s published rate of inflation and the nation’s economic growth.
Based on past federal budgets, if government spending had grown on a par with inflation since 1990, the government would only be spending $1.97 trillion this year. An inflation-adjusted budget from 1960 in today’s dollars indicates an even smaller budget—$0.62 trillion.
Adjusting for the increase in the nation’s gross domestic product (a measure of the nation’s economic growth) since 1990 and 1960, today’s budget should have been roughly $2.8 trillion, or $2.3 trillion respectively.
Growth in government has also vastly outstripped population growth. To give a better perspective on how large government has grown, in 1946, there were 2.3 state and local government employees per 100 citizens. Today there are 6.4 government employees per 100 citizens. Stated another way, if government today had the same proportion of employees with respect to its population as it did in 1946, there would be 12.2 million fewer government jobs today that current taxpayers would have to support (Grandfather Economic Report, March 2007).
All this big spending has left the current big spenders with a smaller proportion of the budget to spend than might be realized. Of the approximate $3 trillion 2008 budget, elected government officials really only have control over around $1 trillion, because the rest is considered “mandatory” spending—meaning mostly Social Security and Medicare. Due to big Medicare promises and Social Security fund plundering, approximately two thirds of the budget is accounted for, right off the top. Worse, as more of America’s population ages, a greater and greater proportion of the budget will go to this kind of “mandatory” spending, leaving less for everything else.
As the government’s financial condition tightens, so called “off budget” items (usually spending deemed “one time” expenses and therefore not included in the annual budget) will probably become more commonplace.
The U.S. government already spends billions on unaccounted-for “off budget” items, such as the war in Iraq and disaster funding.
Take the emergency supplemental spending bill (for the war in Iraq) that the House passed in mid-March. The Democratic-led House added even more money to fight the war in Iraq than the president requested. The total burden on the taxpayer ended up at $124 billion. And what wasn’t publicized nearly as much as the fact that war funding had been passed was the fact that approximately $21 billion of that bill was “pork” money (i.e., money used to buy votes to ensure the bill passed) (www.house.gov/paul, March 26). More than one sixth of the bill was for what almost amounts to a form of bribery.
Among the “pork” that was added to gain the congressional votes was more than $200 million to the dairy industry, $74 million to peanut farmers, and $25 million to spinach farmers. Additional inclusions contained $60 million for California’s and Oregon’s salmon fisheries, $48 million for salaries and expenses for the Farm Service Agency, $50 million for asbestos mitigation at the U.S. Capitol Plant, and half a billion dollars for wildfire management and suppression.
Then, after the House passed the above emergency war supplemental bill by funding peanut producers, the Senate modified the war spending to include $24 million for sugar beets; $388.9 million for funding for backlog of old Department of Transportation projects; $13 million for mine safety technology research; and $100 million to help pay for Republican and Democrat party conventions. Although some of these expenses may in fact be legitimate needs, why do congressmen and senators have to use their votes as blackmail to get their projects funded?
It is no wonder the government can’t balance a budget! To get permission to spend money in one area, the government continually has to spend additional money buying votes. Passing off “supplemental emergency war spending,” which is really packed full of non-war, self-interest spending, is greatly dishonest in the least, and certainly can’t lead to efficient spending.
The “pork” spending might not be so bad if the government had the money in the bank, ready to be spent. But that is not the case: Each year the government borrows hundreds of billions, much of it from foreigners, to finance big expenditures. Last year alone, the government went more than $500 billion further into debt.
In fact, the last time the federal government didn’t spend the country further into debt was in 1960. Successive deficits have compounded upon each other, and now the federal government alone owes $8.88 trillion.
Government spending has gotten so out of control that Congressman Ron Paul labels the proposed 2008 budget as “a monument to irresponsibility and profligacy.”
“Congress remains oblivious to the economic troubles facing the nation, and … political expediency trumps all common sense in Washington,” Paul warns. “The bottom line is that both the Democrat[s] and Republican[s] … call for more total spending in 2008 than 2007.”
America’s economic condition will continue to deteriorate. Voters have learned to vote themselves benefits from the public treasury. Frédéric Bastiat famously summed up the problem of government as the institution where “everybody endeavors to live at the expense of everybody else.” Eventually democracy develops into welfare statism. Consequently, U.S. government is destined to become an ever-more-bloated behemoth as politicians continue to buy the votes needed to stay in power.
Government overspending driven in large part by political posturing and vote pandering has set America on a collision course toward bankruptcy, or massive restructuring.
A new and efficient government structure, free from greed, debt, and vote-buying will replace the current corrupt organization. If you are interested in what much of this new system will be like, read The Wonderful World Tomorrow—What It Will Be Like.