Or lets put it this way: what happens if my credit card interest payments are more than my income? I get a better job, or two or three jobs, right? So I do that, but unfortunately, I still don't manage my money and I get a few more credit cards and rack them up. Then what happens? What happens when the payment on the interest for my credit cards becomes more money than I could ever earn, no matter what jobs I had?
Is that not where our government is heading?
An economic team with American public media did a lot of research, crunched a lot of numbers, and came up with a very interesting game. It is called Budget Hero, where it allows anyone to come up with our country's budget and see if it can be solved. It's very educational and informative as to the situation we are in. you can check it out or play it at:
http://marketplace.publicradio.org/features/budget_hero/
(Sparrow found and pointed this out to me)
The calculations they did predict that the budget will go bust by 2030. By bust, they define it at the point where social security, Medicare, and the interest on the money that we owe will exceed the amount that the government receives in taxes. No money left. Not on defense, diplomacy, roads... so what will happen?
Of course we could just take out more "credit cards", right? Then maybe some future politician will have to deal with a financial meltdown, but at least we won the election! We could always raise taxes, but at what point will taxes become so burdensome that business packs up and moves to China? Then our income by taxation becomes even less and we have to raise taxes more... and you see how that cycle goes...
What is the government's solution to the problem? Simple. Take out another trillion in debt. Disperse that trillion among companies that were unwise in investing in loans that were backed only by speculation, homeowners that could not afford their homes, the auto industry because it's not their fault that the Japanese make better cars, and another stimulus package when the last one did not work. Do we realize how much money that is? The population of the US is around 303,824,640 (July 2008 est.). Divide that into a trillion and you get a financial burden of around $3,300 for each US citizen. Thats not working citizens mind you, thats every man, woman, and child.
It's tough right now because some would argue that it will be harder to pull out of a depression unless we incur more debt, but at what cost? When are we ever going to have a responsible government? Does anyone even think about balancing the budget, let alone paying any of it off? I know Newt Gingrich tried, and became the laughing stock of the nation.
Extend that question now a little further. Are we ever going to have a responsible electorate? In the third presidential election of our country, it came down to a tie between Aaron Burr and Thomas Jefferson. There was even a deadlock in congress, and the ballot re-taken several times, it was so close. In order to win, John Adams advised Jefferson to make some promises about certain issues to appease the other side. Jefferson replied "I will not enter [office], but in perfect freedom to follow the dictates of my own judgment". Contrast that to today's politicians. They promise things out of their ears, and people vote on what will benefit their own interests. Medicare is broken, Social security is beyond broken, but no politician will ever, or can ever touch it in any way. Does our democracy still work?
What happens in 2030?
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I just read an interesting article on the meridian magazine web site (http://www.meridianmagazine.com/ideas/090126more.html) titled "Is More Government the Answer?", written by Spencer Anderson, who works for the Heritage Foundation. He does a good job describing how the tendency in our country towards bigger government has been a gradual process over the years, but which also took big leaps in that direction under Presidents Woodrow Wilson and FDR. One line in the article sums up the reason pretty well: "people want security and politicians want power. If politicians can promise their electorate security, they will stay in power". It also reminds me of the principle well known to the founding fathers which basically states that one of the greatest threats to our freedom was when, and if, the people were allowed to vote themselves money from the public treasury.
The article also does a good job of describing the difference between voluntary public charity and welfare, such as the big difference between charity done through churches and other humanitarian organizations, and that done through government. The government does the redistribution through compulsion and force, and also serves as the arbitrator, while public charity is purely voluntary and done out of love and service to one's fellow human beings.
Of course, if everyone was living the teachings of Christ, we would need little or no government, and undoubtedly a very large part of the reason we are seeing increased government is because of the failure of many to govern themselves through honesty, integrity, and in looking out for others instead of trying to enrich oneself at the expense of others.
As the founding fathers also were very well aware: a people who cannot govern themselves will wind up having a government which has to control them through force.
I also heard recently about Iceland going bankrupt, and its government collapsing. That should be a wakeup call to our president and congress to be careful about not going overboard with spending. Unfortunately, I don't see any obvious steps being take to avoid that outcome.
Before the damage is done, we can take action. Go to this website to do so. It takes about 40 seconds to e-mail all of your representatives. The website is done by Dick Armey, on of the few left that actually want a smaller more responsible government.
http://www.capwiz.com/freedomworks/issues/alert/?alertid=12513636
Good post Hyrum. Unfortunately you forgot to mention the elephant in the room which coincidently is the main reason why Obama was elected in the first place: The stupid war in Iraq. Yes Iraq is now a better place (for now) but what price did we pay? Bush made some stupid decisions which should have been held in check by the constitution and chalked them up to “hard” decisions. As if he deserves a feather in his cap for making a wrong, but none the less hard decision.
Interestingly enough when Bush took office 8 years ago during a time of relative economic prosperity he inherited a budget surplus. Then came 9/11, going after Al Qaeda’s state sponsor Afghanistan was an obvious one but as Obama says “we took our eyes of the ball”. Taking our eyes of the ball is the understatement of the year because when it happens in baseball it means a couple of runs might score when a fly ball is dropped, when it happens in invading a foreign country it means that we will spend $3 trillion that we don’t have while not committing vital forces to the place where we actually belong! Democracy for the despots of the world is a luxury that America can now ill afford, along with NASA and any other non-necessity for that matter.
Now we are caught between a rock and a hard place. On one hand we are facing the second great depression, and on the other we are facing a bankrupt government. I don’t know if this is possible but since hope rings eternal maybe we could go on one last spending spree to try and pry our lifeless economy from the jaws of impending doom… and then when the economy regains a steady pulse shift to miser mode to stave off an avalanche of debt. I guess the media has scared my irrational mind to the point that I want the government to spend like a 16 year old girl in Forever 21 to keep the Boogey man depression stories we heard from our grandparents from happening to us. You know the ones about 30% unemployment, living in tents, and boiling a ham bone for 5 hours just to make supper. At least it makes me grateful for my marginally fulfilling job and the food that it puts on the table.
Almost all Republicans tend to agree with the Democrats as to whether an economic stimulus package is necessary they defer on the most effective way how to implement it. Democrats want more spending, and Republicans want more tax breaks. It’s a no brainer for me that broad tax breaks would be fairer because government spending (especially hurried government spending) is wasteful and full of goodies for special interest groups. Good government infrastructure projects take time to plan but because this is an urgent stimulus packages local governments will be given 90 days to “use it or lose it”. The result will undoubtedly be shoddy overpriced construction projects aimed more at stimulating the economy by creating temporary jobs for a select few than creating something of lasting value. As for special interests here is one thing that my tax dollars are going towards to “stimulate” the economy:
“Funds are available under two new U.S. Department of Education programs approved by Congress: $15 million in grants for predominantly Black institutions.” (see: http://blackamericans.com/blogs/news/archive/2008/06/10/15-million-available-to-predominantly-black-colleges.aspx)
Maybe if I change the color of my skin I can take advantage of that one. In any case with an overwhelming majority Democrats will approve their spending stimulus package with a few token compromises to the handful of Republicans that are left after W’s GOP wrecking ball.
Yes Sparrow, I think the war was a good example of the mindset that America has had since FDR: the government has an infinite amount of money. I don't remember even hearing that as an argument against the war: that it would cost too much.
Sparrow, I believe that the premise of the government spending us into an oblivion to save the economy is false. That premise is based on the notion that FDR got us out of the first depression with the new deal. At best, it may delay the impending doom for a time, and then we (or our kids) will just have to pay for it all the worse(like we are now with the new deal policies).
HR 1, this $825+ billion stimulus package that Pelosi is contriving is nothing short of infuriating. It is 1,588 pages and counting, of government handouts to anything and everything you can imagine. A huge portion of it is a payoff to the groups that got the Democrats entrenched in our government this election, such as 4.19 billion to ACORN.
Global warming activists are having a hay day, even with the broken California budget, not just the huge piece of the cake they are getting from this package. California still doesn't have a budget, and is giving out IOUs instead of tax refunds, and the first thing that ARNOLD does with the Obama administration is ask him to approve tighter emission standards for California auto-makers. I hope that despite all the billions the global warming camp are getting out of this that they don't succeed in stopping global warming. I would rather only have to worry about starving to death - not freezing - when the government goes broke and the economy collapses.
I was watching a panel on MSNBC talk about the economy and the housing market. A suggestion from one of the "experts" was for Obama to fund a construction team that would knock down the old houses that were sitting on the market and not selling. That way they would have jobs, and the housing market would inflate. Everyone wins, right?
I'm not kidding. That was his brilliant solution.
Did I miss something?! We have been trained that we are insane if we do not trust the "experts", yet I feel insane even listening to some of them.
Thanks Phil, good article. It does a good job of concisely showing why and how our government became so big.
I never really though about it just this way; that is an extremely important concept you brought up: that people should not have the power to vote themselves money from the public treasury.
Now that it is the the reality of our government, can you imagine any way that such power could be taken away? It is ironic how liberty is always destroyed with only the best of intentions.
The more I read about this latest so-called "stimulus package", the more I am convinced that it's main purpose is simply a way for the democrats in congress to push forward with their pet projects which have been waiting in the wings for a long time. Little of it actually will result in any kind of job stimulus. See this wall street journal article for a good summary of what exactly is in it: http://online.wsj.com/article/SB123310466514522309.html
Obama's administration will be judged on the outcome of this fiasco, and the verdict, though it may take years to be seen fully and in the light of history, will not be a good one.
Hyrum, your comment about ACORN being funded as part of this also apalls me. Another pet democrat group, which not only contributed to election fraud, but also significantly contributed to this whole housing/mortgage fiasco which started this whole recession in the first place.
Well, we're getting what we deserved by electing this guy - it just surprises me how quickly he is materializing into the extreme leftist crony that I thought he was, which he very effectively hid and downplayed during the election. And, it doesn't help that Bush and other fiscally irresponsible Republicans set him up for this by starting this whole stimulus package idea.
My feeling on Obama is that, though he likely wants to do the right thing, he is bound by his obligations of his democrat supporters to do what he has promised them to do, and bound also by the special interest groups for all of their pet projects and funding.
If McCain and Huckabee hadn't sabotaged the last election with their coop effort to derail Romney's campaign, I think we'd be in a much better position with a man like Romney in the white house to deal with this financial crises. He surely would not have been pushing for these so-called "stimulus packages", but would have been able to come up with much wiser solutions which look at the long term, not just short term "band aids", and pork projects to please special interest groups.
Just a quick calculation: If you add the TARP and proposed bailout packages together: 700billion + 900billion you get $1.6 trillion. There are currently 138 million US taxpayers (and that number is decreasing). If you divide 1.6 trillion by 138 million you have the amount of debt that each tax payer now owes because of the bailouts: $11,594.20! I bet the bailout doesn't sound as appealing anyomore. Add that number to a $3 trillion Iraq war and each of us is in a lot of debt!
Another interesting book I just read about on Glenn Beck's website: "Meltdown" by Thomas E. Woods, Jr.
Mr. Woods is part of the Ludwig Von Mises Institute, which Cicero mentioned in his emails/postings, which has the collection of the works of Bastiat. Meltdown sounds like a good book which concisely lays down the case of the how's and why's we had this economic crises and what to do about it. I plan to get a copy of it and read it.
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