Budget & Tax
Brandon Dutcher | August 3, 2009
This Outrageous Spending Must Stop
When most people find themselves deep in debt, the first thing they do is look for ways to cut their spending. Unfortunately, the federal government is doing just the opposite.
According to the Congressional Budget Office, the national debt this year will approach a record $8 trillion, with $1.8 trillion of that added this year alone. Amazingly, just eight years ago our national debt was only $3.3 trillion, meaning that in just the past eight years we have more than doubled the debt it took our nation 225 years to amass. To make matters worse, the CBO projects that the debt will continue to rise for the foreseeable future, nearly reaching $12 trillion by 2019, and this includes large tax increases scheduled for 2011.
This must stop.
Contrary to what some of our elected officials believe, every penny the government spends must be paid for in taxes on somebody, somewhere, at some time. If we do not pay the taxes today, and decide to incur a debt instead, we are simply passing the tax off onto future generations.
This must stop.
What is even more troubling is that the larger our debt grows, the larger the interest payments we must make. The CBO estimates that by 2019 taxpayers will be paying $566 billion of interest each year on our debt-more than the federal government spends on any current government program except for Social Security and the military. Remember, when we make these interest payments we do not receive any government services. This is money we will be effectively throwing away.
This must stop.
The most troubling thing about having a growing national debt, though, is that it slows the rate of economic growth, thereby making future generations poorer. When governments run a debt, they must borrow money to fund government programs. Yet, when the government borrows money it is more difficult for private businesses to borrow money, making it more difficult for businesses to expand. This process, what economists call the "crowding out of investment," leads to slower economic growth and lower future incomes.
This must stop.
The only way we can stop this madness is to stop spending so much money. The CBO estimates that next year all federal government outlays will total $3.5 trillion. They will be a little higher under the Congressional Budget Resolution approved recently. If we freeze total government spending at that level we still would not balance the budget until 2015-again assuming large tax increases in 2011. Still, freezing government spending at $3.5 trillion annually will shave nearly $4 trillion off the national debt in the next 10 years. Notice that under a government spending freeze we would have the same national debt in 2019 that we will have this year ... we would have stopped the madness.
It is important to remember that a true freeze on government spending does not mean that every program must be frozen. We can spend more on defense if we need to. We can spend more on health care if we need to. We can spend more on education if we need to. We can spend more on Social Security payments if we need to. Under a spending freeze, though, every penny of increased spending in these programs must be offset by penny decreases elsewhere in the budget.
Where can we cut? We can start with farm subsidies. The federal government will spend more than $10 billion this year on farm subsidies, which the USDA admits mainly go to large, wealthy farmers, instead of the small family farms. We can eliminate tens of billions more by eliminating programs from the stimulus package that are not scheduled to begin until after the economy already has recovered. And we eventually can save hundreds of billions by seriously exploring ways to control entitlement spending.
There is no doubt that some government spending is important, necessary, and beneficial. There also is no doubt that we cannot afford the level of government spending currently being proposed in Congress. If we continue down this path of profligacy, we will only make our children poorer. Speaking as a father of two young children who are counting on me to protect them, I will continue to say that this must stop.
Dr. Mickey Hepner (Ph.D., University of Oklahoma) is an associate professor of economics at the University of Central Oklahoma.
Senior Vice President
Brandon Dutcher is OCPA’s senior vice president. Originally an OCPA board member, he joined the staff in 1995. Dutcher received his bachelor’s degree in political science from the University of Oklahoma. He received a master’s degree in journalism and a master’s degree in public policy from Regent University. Dutcher is listed in the Heritage Foundation Guide to Public Policy Experts, and is editor of the book Oklahoma Policy Blueprint, which was praised by Nobel Prize-winning economist Milton Friedman as “thorough, well-informed, and highly sophisticated.” His award-winning articles have appeared in Investor’s Business Daily, WORLD magazine, Forbes.com, Mises.org, The Oklahoman, the Tulsa World, and 200 newspapers throughout Oklahoma and the U.S. He and his wife, Susie, have six children and live in Edmond.