President Obama recently slammed GOP presidential candidate Mitt Romney for embracing the $3.5 trillion budget proposal put forward by Republican Paul Ryan of Wisconsin. He even accused Romney of being a radical. An odd accusation for Obama to make when you consider that Obama has spent the last three years trying to remake the U.S. "Reactionary" would have been a more appropriate word coming from the president's mouth. Ryan's proposal calls for cutting the size of government and reducing spending. The details are long, and I must say boring. There is nothing overly dramatic in his proposal. It is a long list of adjustments and shifts that is only alarming in its scope. It touches on almost every social program in America. By most accounts the budget proposal has little chance of passing. That is because it is a long list of adjustments and shifts that touches upon almost every social program in America. What stands out is that the president can condemn a $3.5 trillion budget as miserly.
Everyone in Washington agrees that something has to be done over the deficit. They disagree over what. Some say revenue has to be increased. Others say spending has to be cut. There is a middle ground between the two.You could hold government spending flat and wait for the economy to catch up. But that is the least likely scenario of all. If you simply freeze spending and taxes, no one in Washington would win. No one could boast of how they cut spending or increased funding. There is not a revenue problem in Washington. There is a spending problem. How much does the nation need to spend in a year? That depends on who you ask. According to President Obama and his allies, more than $3.5 trillion. How much debt can the U.S. afford to carry? That too depends on who you ask. According to President Obama and his allies, more than $13 trillion.
President Obama can point to Reagan all he likes but that doesn't change a thing. Just because Reagan and Bush spent us into a hole does not give Obama a license go on digging. You can talk of trickle down and priming pumps all you like but at some point the red and black lines have to meet if disaster is to be avoided. Revenue will never catch up if you keep digging. The looming financial meltdown is not a sudden crisis. It is a slow moving and entirely avoidable disaster. It has been coming for years. Reducing deficits will do nothing to stop it. It will only slow it down. It is absolutely pointless to talk about reducing the debt until you can
pass a balanced budget. If you cannot or will not pass a balanced
budget, do not even talk about the debt. It is like an alcoholic telling
the bartender about all the wonderful things he is going to do after he
gets sober. In the mean time he will take another drink.
A $3.5 trillion budget reactionary? How can that be? That does not even
take into account the two and a half trillion dollars spent by state and local governments last year. The federal government collected $12,292 for every person in the U.S. last year. If you throw in state and local governments, the amount collected in taxes goes up to $19,998 per person. Total government spending, including state and local
governments in 2010 was $5.8 trillion. That is over $18,500 for every
man, woman, and child in the U.S. Surely a few hundred more dollars from every American won't matter much.
Even if some can't come up with it, there are plenty who could pick up
the slack. But consider this: there are over 313 million Americans. What
if every American took just $1,000 of what they paid in taxes and went
shopping with half of it and saved the rest. Just imagine what the
economy would look like. That would still leave the government with a
couple of trillion to spend, more if you consider how much revenue would
increase with the explosion of economic activity that a hundred million in
consumer spending would generate. In 1991 the government took in $1,055
billion. In 2001 it took in $1,991 billion in current dollars. In 2011
it took in $2,173 billion. Not bad. Unfortunately, it spent $3.6
billion. That is bad. Federal revenue has steadily climbed over the
years. The problem is that federal spending has increased at a higher
rate.
You can disagree over what obligations the government has and to whom. You can argue the merits of policy. You can question the extent to which government should regulate commerce. But you cannot say that such policies and the need to fund them are not justifiable attempts to meet the concerns of the public. The same cannot be said of the debt. Payment on the debt feeds no one. It shelters no one. It does not build a single bridge or library. It does not fund a single policeman or fireman. It buys not one bullet or tank. It is simply sent out the door. The $164 billion dollars paid in interest on the debt benefited no one but our lenders. That is the burden of the national debt. That is the burden that will only get worse until we steel ourselves to do what is necessary to address it.
Central to the problem of addressing the debt is the cost, benefit time line. The pain of spending cuts would be felt immediately. The benefits would take years, perhaps even decades, to materialize. Adults should know that sacrifice and patience are integral parts of success. They have to consider the bigger picture. They choose a goal and make a plan. They determine what will have to be done and what will have to be avoided, what will be retained and what discarded. Then they brace themselves and set out. Children do not care about the future. They have no interest in the consequences of their behavior. They want a bike and they want it now. The future does not exist for children. They live in the present.
Very few politicians are willing to run for office on a platform of how little money they will bring home if elected. Even fewer would run on a platform of what services they will curtail and deny their constituents. That is because we wouldn't vote for them. Until people are willing refuse money from Washington there will be no such thing as too much government spending.
