Two years ago, in 2013, conservatives in the United States Congress passed a “sequester” law. It reduced Federal discretionary spending across the board by $85 billion. It was a blunt hatchet approach to a problem that required a careful scalpel. It was also done too late and did too little. But the conservatives who understood our Federal debt and unfunded liability problems, were desperate to do something. The sequestered amounts were $85 billion per year, a big number to most of us, but only about 2.4% of what our Federal government spends in total each year. Nevertheless, it made at least a small statement that unconstrained Federal spending can not continue the way it had been going. It was the initial act of a spending addict to break its destructive habit.
Our Government Abandoned Its Attempt to Break It’s Spending Addiction
Alas, just a few weeks ago, our Congress reneged on the “sequester” constraints and approved a budget which ended the little good it had done just two years before. While the additional spending restored to the Federal budget will amount to only a small percentage of our government’s total annual spending, its symbolic effect is heartbreaking. Our government abandoned even its feeble attempt to break its spending addiction. In so doing it is doing just what so many addicts do:
• They deny they have a problem because they can succumb to their addiction without becoming totally dysfunctional. Our government can still borrow money to cover its deficits. In fact, it even borrows from itself, so theoretically its borrowing power is unlimited.
• They insist they are different because they are better and can handle addictions others can’t. Up until a few months ago, I am sure the Greek government also felt that way. The problem, of course, is that no government can indefinitely deny the fundamentals of market economics. If they try, the markets are swift and harsh in their retribution. Just ask the Greeks.
• They justify what they are doing by saying almost everyone else is doing much the same thing. True, some governments in the world today continue to spend beyond their means. In fact, over the past century, there have been many governments which have done this. But, without exception, they all end up the same way. They overspend; then they borrow to cover deficits; then they print money to pay back their loans (or to cover deficits); ultimately they print so much money that their county falls into hyper inflation. This wipes out the government and all its people because its fiat money (un-backed by assets) becomes virtually worthless. The poor suffer the most. Just ask the Zimbabweans; and when you do, ask them to show you one of their one hundred trillion ($ 100,000,000,000,000) Zimbabwean dollar bills (which were legal tender until just a few years ago).
Our Politicians Are Addicted to Federal Spending
Make no mistake about it. Our Federal government has an EXPENSE problem not a REVENUE problem. It has this problem because the majority of our politicians are addicted to Federal spending. They make the laws that spend the money (not their own money, but our collective money), and by their spending they hope to “buy” the votes of their constituents. And it is these votes which give them job security (i.e. re-election). Irrational, self-destruction, and dreadful, yes. But almost all addictions are.
If we hope to solve this problem for our children and grandchildren, we must approach it like the addiction it is. We must first stop the growth in federal spending. Then we must start reducing this spending until it is balanced by the revenues generated by a reasonable and fair system of taxation. Then we must generate surpluses to start re-paying our debts ($18 trillion) and funding our unfunded liabilities (around $100 trillion). And finally, we must make sure our politicians never do this again.
We Must Not Let Politicians Destroy Our Country.
We are a great people. We were a great country. We must not let politicians destroy us or our country. This transcends political parties. Both parties must share the blame for our present problems, and both must cooperate to solve these problems. Our time has run out. Every unchecked addiction eventually gets to a point of no return. Our Federal spending addiction is just about there now. We can no longer ignore it, nor can we let our politicians “duck it.” It’s time for some tough decisions and some hard medicine. We must act BRAVELY, we must act NOW…Bill O’Neill