The U.S. federal government spent about $6.1 trillion in fiscal year 2023.  There are about 340 million people in the United States.  There are about 131 million households.

That means that each household, on average, paid about $46,500 towards federal spending just in the last year.  This doesn’t include state and local government spending, which accounts for most of the spending when it comes to roads, police, firefighters, and schools.  Even though these don’t have to be funded by any government, these are things that actually matter to people.

Are you and your family getting $46,500 per year in benefits out of the federal government?

Sure, some of this money does go back into our pockets.  For some people, it might be directly, such as with Social Security.  For others, maybe they consider the small amount the federal government “contributes” to the government schools as important.

Harry Browne liked to ask the question: Would you be willing to give up your favorite government programs in exchange for never having to pay income taxes again?

We are in a situation now where the majority of the money spent by the federal government isn’t even coming from income taxes.  There are payroll taxes, which are really just a different bucket of income taxes.  There are corporate taxes.  There are capital gains taxes.  There are many different types of excise taxes.

Worst of all is the debt/ inflation tax.  The government “only” collected about $4.4 trillion in “revenue” in the fiscal year.  So, nearly $1.7 trillion was just borrowed.  But this isn’t free money.  This money has to come from somewhere.  It is $1.7 trillion that is drained from the private sector and spent by the government.

Would You Give Up Your Favorite Government Program?

I’d like to rephrase Harry Browne’s original question.  Are you getting $46,000 in benefits for you and your family from Washington DC?  Would you be willing to give up your favorite government programs for that amount?  Would you be willing to give them up for just half that amount?

Some people will scream national security.  Some people will scream about Social Security and healthcare.  If the government just spent half as much, say $3 trillion, that would still get you a lot of Medicare, Social Security, and defense.  But you wouldn’t be able to fund Ukraine and run an empire overseas.  You wouldn’t be able to have millions of bureaucrats like Dr. Fauci doing virus research and climate change research and handing out electric vehicle credits.

We could scale back the so-called entitlement programs and just have an actual defensive military.  If that cost $3 trillion, then you could at least save about $23,000 for you and your family every year.

Status Quo Bias

This is a situation where people adjust their thinking and behavior to the new status quo.  The federal budget just goes up nearly every year from the previous year.  We think it is just normal for the government to have its hand in everything.

If you compare 2023 America to the America before 1913 and the income tax and Federal Reserve, the difference is stark.  While the U.S. government had its overseas interventions then, it wasn’t running an empire overseas.  It wasn’t involved in a massive welfare state at home.  Most taxes were paid at a local level, and the overall burden of taxation was a fraction of what it is now.

If the U.S. budget were cut in half overnight, there would be a period of adjustment, especially for those who are so dependent on federal spending.  But after the initial shock, we would see a prosperity that is unimaginable.

Imagine

Somehow, we still see increases in production and great increases in technology in spite of massive government taxation and interference.  Imagine what would be if the federal government were drastically scaled back.  People would be wealthy beyond their wildest dreams in a relatively short amount of time.

Just imagine if you had an extra $20,000 (tax free) in your pocket this year.  Would you pay down some debt?  Would you donate to charity?  Would you save it for a nice vacation?  Would you help fund your retirement account?  Would you upgrade your house?  Maybe it would be a combination of several of these things.

Now imagine that you have that extra $20,000 every single year after this.  Just think of the possibilities.

The American people are getting the short end of the stick from their government.  If the American people free themselves from the chains of Washington DC, they would be far wealthier than they could imagine.