It is unbelievable how we get accustomed to the new normal. In this case, the amount of government spending compared to a decade ago is staggering. And it was quite staggering a decade ago just how much the government – particularly the federal government – was spending.
The latest budget proposal from the Biden handlers is for a total of $7.3 trillion. That is just a ridiculous sum. As usual, it is filled with corruption, waste, funding things that degrade our society, funding the military-industrial complex, and so much more. But even if all of that money was being used in an attempt to help the American people, it would still be just an outrageous sum.
There are about 340 million people living in the United States. If you take every man, woman, and child, that comes to over $21,000 per person. That doesn’t include state and local government spending. And a one-year-old baby isn’t going to be paying any taxes.
There are about 130 million American households. That means that it costs the average household about $56,000 per year to fund the federal government. Is your household getting $56,000 worth of “services” from the federal government? The question answers itself.
To be sure, it is appropriate to say that all households ultimately fund the government. Corporations pay taxes, but ultimately these taxes are paid for by employees, owners, shareholders, and consumers. These are all individuals.
Imagine
I think back to Harry Browne’s book called The Great Libertarian Offer. He proposed getting rid of the federal income tax. He asked what you would do if you had an extra $10,000 per year. Would you save more for retirement? Would you take that vacation for your family that you always dreamed of? Would you give money to your favorite charity and make a difference?
In today’s world, it might just mean paying off some debt. Maybe it would mean homeschooling your children. Maybe it would mean getting a new roof for your house. It could be just taking the edge off of life and being more flexible. It might mean less stress and anxiety for many people.
Of course, today’s numbers would be far bigger than $10,000. Let’s say the federal budget were cut in half. What would your household do with an extra $25,000 per year? Some of that might come in the form of lower prices, but it would still be real. It would be resources that the government wasn’t consuming and misallocating.
When Does This Insanity End?
Neither of the major parties is serious about getting any control of the federal budget. They can’t even come close to a balanced budget, meaning one that doesn’t run a massive deficit. The debt just keeps piling up.
To reduce the budget, or to just stop increasing it, would be politically impossible in today’s world. The American people say they want less government and less government spending, but they almost never support the few people who say they want to make deep cuts in the budget. The easiest place to cut would be in foreign affairs, but the politicians want to keep funding Ukraine and everything else under the sun. Unfortunately, there just isn’t enough pushback yet from the American people.
I think the insane spending is going to end only when it can’t feasibly go on any longer. The budget won’t be reduced politically, but it may be reduced because of the laws of economics. It will come to a point that the debt just can’t go any higher because the government won’t even be able to pay the interest on the debt. The only way they will be able to is by creating new money, which then will risk massive inflation.
There will be an end to this madness, but it isn’t going to come about in an orderly way. It is going to be chaotic, and there will be quite a bit of pain associated with it. But there is a lot of pain now for middle-class America anyway, so it is better that they hit the fiscal wall sooner rather than later.
We need a massive reduction in the size and scope of government, particularly at the federal level. Only then will Americans see a significant increase in living standards.