are any indication. But if we want more economic freedom and a healthy and robust economy, serious inroads need to be made into federal spending. Otherwise, tax cuts will simply lead to more borrowing, more inflation, and the continued decline of the dollar. As I write, we are paying about $1.4 billion every day just for the interest on the national debt. Because our government refuses to live within its means, every single day we spend $1.4 billion and receive absolutely nothing in return.
But instead of talking seriously about how we might restore fiscal sanity to the federal budget, the political establishment tries to distract us with phony issues like the debate over “earmarks,” legislative provisions that direct federal money to local projects. One need not look very hard to find examples of abuses of earmarks. But even if all earmarks were eliminated we would not necessarily save a single penny in the federal budget. Earmarks are funded from spending levels that have been determined before a single earmark is agreed to, so spending levels remain the same with or without earmarks.
By eliminating earmarks designated by members of Congress, all we would accomplish would be to transfer the funding decision process to federal bureaucrats and away from elected representatives. In a flawed system, earmarks can at least allow residents of congressional districts to have a greater role in allocating federal funds—their tax dollars—than if the money is apportioned behind locked doors by bureaucrats.
The real problem, and one that was unfortunately not addressed in 2007’s earmark dispute, is the size of the federal government and the amount of money we are spending in these appropriations bills. Cutting even a million dollars from an appropriations bill that spends hundreds of billions will make no appreciable difference in the size of government, which is doubtless why politicians and the media are so eager to have us waste our time on this.
There is a danger that supporters of limited government will focus on this trivial question and neglect the much more important and difficult battle of returning the federal government to spending levels more in line with its constitutional functions. Without taking a serious look at the actual total spending in these appropriations bills, we will miss the real threat to our economic security.
The kind of spending cuts we obviously need will not be easy, since our government has encouraged so many Americans to become dependent on federal programs. These programs cannot survive much longer without a financial collapse. Our national debt, now nine trillion dollars, does not include the unfunded liabilities to programs like Social Security and Medicare that will come due in the coming decades to the tune of another $50 trillion. It is simply impossible to fulfill those promises. The level of taxation necessary to fund a figure like that would destroy the American economy and dramatically shrink the productive base from which those funds could be drawn.
David Walker, the comptroller general at the U.S. Government Accountability Office, tells us that Social Security and Medicare are headed for disaster because of demographic trends and rising health care costs. The number of younger taxpayers for each older retiree will continue to decline. The demand for “free” prescription drugs under Medicare will explode. If present trends continue, by 2040 the entire federal budget will be consumed by Social Security and Medicare.
Forty percent of our entire private-sector output
will need to go to just these two programs. The only options for balancing the budget would be cutting total federal spending by about 60 percent, or doubling federal taxes.
Furthermore, Walker asserts, we cannot grow our way out of this problem. Faster economic growth can only delay the inevitable hard choices. To close the long-term entitlement gap, the U.S. economy would have to grow by double digits every
But instead of talking seriously about how we might restore fiscal sanity to the federal budget, the political establishment tries to distract us with phony issues like the debate over “earmarks,” legislative provisions that direct federal money to local projects. One need not look very hard to find examples of abuses of earmarks. But even if all earmarks were eliminated we would not necessarily save a single penny in the federal budget. Earmarks are funded from spending levels that have been determined before a single earmark is agreed to, so spending levels remain the same with or without earmarks.
By eliminating earmarks designated by members of Congress, all we would accomplish would be to transfer the funding decision process to federal bureaucrats and away from elected representatives. In a flawed system, earmarks can at least allow residents of congressional districts to have a greater role in allocating federal funds—their tax dollars—than if the money is apportioned behind locked doors by bureaucrats.
The real problem, and one that was unfortunately not addressed in 2007’s earmark dispute, is the size of the federal government and the amount of money we are spending in these appropriations bills. Cutting even a million dollars from an appropriations bill that spends hundreds of billions will make no appreciable difference in the size of government, which is doubtless why politicians and the media are so eager to have us waste our time on this.
There is a danger that supporters of limited government will focus on this trivial question and neglect the much more important and difficult battle of returning the federal government to spending levels more in line with its constitutional functions. Without taking a serious look at the actual total spending in these appropriations bills, we will miss the real threat to our economic security.
The kind of spending cuts we obviously need will not be easy, since our government has encouraged so many Americans to become dependent on federal programs. These programs cannot survive much longer without a financial collapse. Our national debt, now nine trillion dollars, does not include the unfunded liabilities to programs like Social Security and Medicare that will come due in the coming decades to the tune of another $50 trillion. It is simply impossible to fulfill those promises. The level of taxation necessary to fund a figure like that would destroy the American economy and dramatically shrink the productive base from which those funds could be drawn.
David Walker, the comptroller general at the U.S. Government Accountability Office, tells us that Social Security and Medicare are headed for disaster because of demographic trends and rising health care costs. The number of younger taxpayers for each older retiree will continue to decline. The demand for “free” prescription drugs under Medicare will explode. If present trends continue, by 2040 the entire federal budget will be consumed by Social Security and Medicare.
Forty percent of our entire private-sector output
will need to go to just these two programs. The only options for balancing the budget would be cutting total federal spending by about 60 percent, or doubling federal taxes.
Furthermore, Walker asserts, we cannot grow our way out of this problem. Faster economic growth can only delay the inevitable hard choices. To close the long-term entitlement gap, the U.S. economy would have to grow by double digits every
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