You may remember a time when the biggest political battles in Washington, D.C., were over balancing the budget and paying off the national debt. But it seems like a distant memory now. For a couple of decades now, it feels like both Democrats and Republicans have given up on the idea of fiscal conservatism. The once-powerful Blue Dog caucus of the Democrat Party is merely a shadow of its former self. And the GOP has repositioned itself from the days of Sen. Bob Dole’s push for a balanced budget. At The Wall Street Journal, Grover Norquist and Vance Ginn explain just how bad it’s gotten for America, writing:
The U.S. national debt recently passed $33 trillion, more than 120% of gross domestic product. Left-wing politicians assert that Americans are undertaxed, but the data show that the government spends too much.
Americans for Tax Reform launched the Sustainable Budget Project in September to document the rise in government spending over the past decade. The results are clear: Overspending is the problem.
Between 2013 and 2022, aggregate annual spending by the 50 state governments, excluding federal funds, increased 51.7%. Total annual federal spending rose 69.4% during the decade, more than three times as fast as the 21.6% increase in the rate of population growth plus inflation. If government grows faster than this rate, then it is growing faster than what the average taxpayer can afford.
Had the federal government limited the growth in spending to a maximum of the population growth rate plus inflation during that decade, in 2022 the federal government would have spent $1.6 trillion less than it did, resulting in at least a $200 billion surplus. If the federal government had done this over the past two decades, the national debt would have increased by less than $500 billion instead of $19 trillion.
If state governments had limited spending growth to the rate of population growth plus inflation during the last decade, they would have spent $1.39 trillion in 2022, $344 billion less than the $1.74 trillion they actually spent.
Had federal and state governments simply grown no faster than the rate of population growth plus inflation, taxpayers could have been spared at least $2 trillion in taxes and debt in 2022 and trillions of dollars more over time. The U.S. hasn’t needed drastic budget cuts, just slower, more sustainable debt growth.
Our project defines each state’s overspending problem by providing a dollar-figure spending ceiling and allowing anyone to see how government spending in a state has grown relative to the rate of population growth plus inflation. It will publish and promote an annual benchmark spending level for every state, which lawmakers must not exceed if they want to keep state spending in check.
Limiting state spending to the Sustainable Budget Project benchmark isn’t impossible. Lawmakers in more states are beginning to implement the sorts of structural reforms necessary to slow the rate of government spending to a sustainable clip.
Action Line: America, just like your family, can only spend as much as creditors believe can be paid back with interest. Rising rates and rapidly expanding debt can only be sustained for so long. Don’t allow your own budget deficit to explode the way America’s has; save til it hurts. Click here to subscribe to my free monthly Survive & Thrive letter.