The real goal should be reduced government spending, rather than balanced budgets achieved by ever rising tax rates to cover ever rising spending.” Economist Thomas Sowell
A certain kind of spending makes our country go round. It is when one American reaches into his or her pocket and trades money for something of value. Commerce among Americans was described by John Kennedy as “A rising tide raises all boats.” America got rich in comparison to the rest of the world by this commerce.
Sandwiched into commerce was government which was initially a small part of the total picture. The total bite of all national, state and local taxes at the start of the 20th century was about three percent. Today it is 30 percent or higher. For that increase Americans got a robust military, roads, hospitals, fire stations and a first rate judicial system. These things make America great.
Sadly, in the midst of these great improvements there are also many do-good projects. We have so many of them that we have out of control spending. We reached a tipping point where our government is making the extra revenue needed out of thin air since America can no longer borrow that much money.
How much? Currently around 40% of all government spending is make-believe money. There is a notion that dollars created out of thin air by our government do no harm. This make-believe money is now the coin of the realm. But consider the problem of owning dollars not backed by anything of value.
There is an old joke: a man walks into a bar and says, “Give me a drink before the trouble starts.” The bartender pours a drink. The man gulps that down and says, “Give me another drink before the trouble starts.” So the bartender pours another drink. The man gulps it down and the bartender asks, “When is the trouble going to start?” The man says, “As soon as you realize that I don’t have any money.”
Drink up America, because the trouble is just about to begin. Read full column