Yesterday, President Obama remarked that a government shutdown “would throw a wrench into the gears of our economy.” Here at Economic Prism, we see this differently. In fact, such a wrench may be just what we need—especially if it helps secure the lid on our mounting national debt.
Since 1940, Congress has raised the debt ceiling 79 times, averaging more than once a year. Clearly, the debt ceiling hasn’t effectively curbed spending. Instead, our debt continues to swell uncontrollably, resembling a cancer that doubles in size every seven years.
The current debt ceiling stands at $16.699 trillion. Yet, it was eclipsed months ago, with the Treasury yet to acknowledge the reality.
According to the US Debt Clock, the national debt has surged to $16.9 trillion, well above the legally permitted limit. Regardless of differing opinions on the ongoing standoff between the House and President Obama, one fact is universally accepted: the accumulation of government deficits and federal debt will weigh heavily on the prosperity of future generations like a ball and chain.
At present, each citizen’s share of the national debt is $53,528. When considering household, business, state, local governments, and financial institutions, the total debt per citizen skyrockets to $188,853. But that’s just the tip of the iceberg…
Social Security and Medicare currently disburse more than they receive, making up the deficit with borrowed funds. In essence, we are borrowing from the future to fulfill promises made in the past. The combined unfunded liabilities of Social Security, Medicare, and prescription drugs (Medicare Part D) have surpassed $125 trillion, equating to $1.1 million per taxpayer. This is an indefensible burden for young adults entering the workforce today.
Ever wondered how we reached this critical state as a nation? Here’s a quick overview.
The Experience of the Last 100 Years
“The principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale,” Thomas Jefferson wrote to John Taylor in 1816. Regrettably, this wisdom has largely been ignored. Politicians understand that promising handouts is the key to election and job security.
Voters typically shy away from discussions of austerity, budget cuts, or responsible spending. Politicians advocating these principles often lose elections, dismissed as cranks or curmudgeons.
Though many profess to value independence, liberty, and freedom, most are drawn to government-provided bailouts, safety nets, and free healthcare. Over the last century, election outcomes show that people consistently vote for benefits they perceive as coming from the public treasury. Moreover, they expect solutions to persistent economic and social issues without taking on the cost.
Most voters do not seek a government committed to nurturing a free society; instead, they look for a government that promises unrealistic solutions and delivers quick fixes. They desire lower taxes while simultaneously asking for increased public spending, dreaming of a future with guaranteed prosperity and comfortable retirements. They want to have their cake and eat it too.
Committed to Mass Public Spending
Consequently, a nationwide policy of government deficits has taken root, forming an attempt to fulfill the demands of the populace. This reflects the preferences demonstrated in voting patterns; the evidence is undeniable…
The collective desire includes funding for schools, museums, nature centers, and various subsidies for agriculture and transportation. There is also a demand for green energy initiatives—hoping everyone else will transition to driving electric cars.
Furthermore, support is sought for perpetual food stamps and disability allowances, alongside funding for quirky projects like robotic squirrels and Moroccan pottery classes. Most importantly, people want these entitlements without feeling the weight of financial responsibility—essentially asking others, including you, to pick up the tab.
In truth, the government has long been committed to excessive public spending, making it virtually impossible to reverse course. While many individuals express outrage over the remarkable levels of national debt, the collective electorate continues to demand their piece of the governmental pie. Collectively, everyone seeks to benefit at someone else’s expense, while politicians readily promise a bounteous future if it secures their election.
You might already be aware of the ramifications. Tax revenues consistently fall short, leading to growing deficits and an ever-increasing debt burden. The Federal Reserve compounds this charade by printing more currency. As a result, personal freedoms are swapped for federal safety nets, which are now fraying.
Don’t expect responsible actions, such as a balanced budget, to emerge from Washington anytime soon. They will maintain the illusion while leaving the messy fallout for future generations to resolve—after all, their re-election depends on it.
Sincerely,
MN Gordon
for Economic Prism
Return from Committed to Mass Public Spending to Economic Prism
