As of now, the federal funding for the upcoming fiscal year (FY 2026) has expired, resulting in a partial government shutdown. In Washington, D.C., and across the nation, nearly one million federal employees are either furloughed or working without guaranteed pay.
By the time you come across this, the shutdown may be resolved. However, merely reverting to the usual oversized governance and its insatiable appetite for funds is hardly a cause for celebration—especially if you’re a taxpayer who cherishes freedom.
Recently, Republican Senator John Kennedy pointed to extravagant spending carried over from the Biden administration as a key reason for the current shutdown. Notable expenditures include $3 million for circumcisions and vasectomies in Zambia, $500,000 for electric buses in Rwanda, and $3.6 million for pastry cooking classes and dance focus groups aimed at male prostitutes in Haiti.
He also highlighted $6 million allocated to media organizations for the Palestinians, $833,000 for transgender initiatives in Nepal, $300,000 for a pride parade in Lesotho, $882,000 for social media mentorship in Serbia, and $4.2 million for LGBTQI communities in the Western Balkans and Uganda.
This spending should undoubtedly be halted. However, addressing these specific expenditures wouldn’t significantly reduce Washington’s broader spending issues.
The budget deficit for fiscal year 2025 is projected to surpass $2 trillion. When totaled, the questionable spending identified by Kennedy amounts to merely $19.3 million. Therefore, to balance the budget, cuts totaling an additional $1.99 trillion would still be necessary.
It’s critical to understand that the government shutdown symbolizes much more than mere political theatrics involving the funding of focus groups for male prostitutes. It starkly illustrates a deep and fundamental divide in our society—the substantial gap between the taxpayers and those who benefit from government funding.
The Great Divide
In a democratic society, we have two main groups: taxpayers and tax consumers. Taxpayers are individuals who contribute more in taxes than they receive in benefits from the government. In contrast, tax consumers are those who gain more from government assistance than they contribute through taxes.
Taxpayers—specifically, net taxpayers—contribute to the government’s revenue through various taxes, including income, payroll, excise taxes, tariffs, and additional fees. Their financial contributions outweigh the benefits and services they receive from governmental programs.
This group fuels the economy’s engine—comprised of entrepreneurs, small business owners, and highly productive workers in the private sector—ultimately generating a surplus for the Treasury.
On the flip side, tax consumers are individuals whose total government benefits, salaries, grants, or subsidies exceed their total tax contributions. This category also encompasses government bureaucrats who manage the welfare-warfare state.
While many of these bureaucrats genuinely seek to serve the public, they often find themselves in positions of job security, steady pay, robust health benefits, and guaranteed pensions. However, the threat posed by an extended government shutdown conflicts with their expectations, placing them at the center of the very systems that are now grinding to a halt.
Suddenly, they are faced with the uncertainty and stress experienced by the rest of us. It serves as a stark lesson about the vulnerabilities inherent in a career that relies on the goodwill of taxpayers. When the financial resources procured from net taxpayers dry up due to political deadlock, their job security dissipates.
From Night-Watchman to Overgrown Leviathan
The very individuals responsible for managing the extensive machinery of the state are now casualties of its volatility. The government shutdown of 2025, which commenced on October 1st, has led to approximately 800,000 federal employee furloughs, costing taxpayers an estimated $400 million daily in back pay for those effectively idle.
This state of affairs is simply the inevitable result of an overgrown, intrusive government. It signals a bloated system that is beginning to malfunction, raising questions about the fundamental role of government.
In a nation founded on principles promoting individual liberty and limited government, the state was intended to function as a night-watchman—narrowly focused on safeguarding individuals from coercion and violence.
In practical terms, this framework allows for certain essential government duties, such as policing, judicial processes, and defense. Their primary purpose is to uphold the Non-Aggression Principle, which states that no person, including government officials, has the right to initiate force against another individual or their property.
However, taxpayers are often subjected to violations of their rights. When the state extracts wealth from them to fund an unyielding bureaucracy or to distribute benefits to others, it employs coercion—the threat of fines, incarceration, or force—to appropriate private property. This amounts to theft, undermining the individual’s right to the fruits of their labor.
Departments such as the Department of Education and the Department of Energy, among many others, are largely redundant. Furthermore, they serve as cumbersome and ineffective redistributors of wealth and personal affairs. Their responsibilities could be managed more efficiently, ethically, and responsibly by private enterprises or local, voluntary community organizations.
Ultimately, the responsibility for one’s wealth should rest with the individual who earned it—not with a politician or an anonymous bureaucrat. This principle is essential to maintaining a free society.
The Inevitable Collapse of the Bloated State
The current government shutdown starkly illustrates the vulnerabilities inherent in a system founded on coercion. When the state assumes control over the lives of millions by redistributing resources from some to others, it creates systemic instability.
Opting for yet another temporary funding measure to restore the status quo will only prolong the instability, leading to a more significant crisis. Congress lacks the resolve to address this matter effectively; they fail to recognize the necessity of constraining government until it can perform its essential roles adequately.
In the meantime, the chaos manifest in delayed flights, furloughed workers, stalled regulatory approvals, and shuttered national parks provides clear evidence that the government is far too expansive, encroaching upon too many areas of the economy. This was never its intended role; alongside encroaching on freedom and individual liberty, it is driving the nation toward insolvency.
Ultimately, the extravagant expenditures highlighted by Senator Kennedy are but a minor detail amid a more significant crisis: a $2 trillion deficit and a staggering $37.8 trillion national debt propelled by an overreaching government that has disregarded its constitutional constraints. The shutdown serves as a harsh reminder that a system reliant on the coerced wealth of net taxpayers to sustain a vast bureaucracy is, by its nature, unsustainable.
Restoring stability calls for more than political maneuvering; it requires a philosophical shift back to the minimal, night-watchman state that guarantees individual liberty and fiscal health, thereby diminishing the gap between those who pay taxes and those who benefit from them.
However, the journey back toward limited government will not be directed by Washington politicians; it will be enforced by the unavoidable collapse of the bloated state.
The recent surge in gold prices above $4,000 per ounce indicates that this collapse may already be underway. The politicians, no doubt, will be among the last to come to this realization.
[Editor’s note: Join the Economic Prism mailing list to receive a complimentary copy of an important special report titled, “Utility Payment Wealth – Profit from Henry Ford’s Dream City Business Model.” For a special trial deal on MN Gordon’s Wealth Prism Letter, you can access that here.]
Sincerely,
MN Gordon
for Economic Prism
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