Does the US government have a spending problem? That question is obviously rhetorical. But the problem is a problem for the entire nation, not just for elected officials who might get voted out of office in a ‘free-and-fair’ election.
It used to be the case that federal spending was less than 5% higher than federal tax revenue. When that is the case, then the non-tax revenue — such as the selling of oil leases on federal lands — fills in the gap so that the national debt does not rise from year to year.
But the last time that the federal government spent less than 5% more than federal tax revenue was 1951 — 72 years ago. Here is the trajectory of federal spending as a multiple of federal tax revenue:
The twin peaks in 2009 and 2020 indicate years when federal spending was more than 3 multiples of federal tax revenue, but they don’t represent a departure from the 70-year trend.
The length of the trend indicates that federal spending has a positive feedback, so that some federal spending leads to more federal spending, which leads to even more of it.
While one way to spend more than tax revenue is to sell bonds (become indebted), another main way to spend more than tax revenue is to print the money. Debt and inflation are also mutually-reinforcing: spending more than you earn causes debt, and high debt adds pressure for inflation.
The vicious cycle of self-inflaming federal spending eventually leads to so much debt-fueled leverage that economic progress and even sustained living standards become less and less possible to current and future Americans. Bank debt is debt that buys “money,” but non-bank debt (nonfinancial debt) is debt that buys “things.”
Non-bank debt mostly comes from government, businesses, and households, but crisis exists when it reaches two or three multiples of GDP:
To fix this, life-changing cutbacks are required in federal spending, but if we don’t fix this, then even bigger life-changing cutbacks are coming to America. We are in a boiling pot. We can choose to jump out of it and jump directly into the fire, but here is the difference:
—If we stay in the pot, then we will be cooked.
—If we jump out of the pot and into the fire, then we can possibly escape doom (“stop, drop, roll”).
We’ll need to choose one fate soon, or that choice will get made for us by the elites.
Cutting back on federal spending means that some federal contractors, and other recipients of government largesse, will get “burned” — to continue the analogy — but everyone benefits from free enterprise, eventually.
Even those who seek unearned value, while not getting what they want (i.e., the plunder of others), will still end up living inside of a society where life improves. They’d rather choose plunder over ‘free-and-fair’ trade with others, but we outnumber them.
Reference
U.S. Bureau of Economic Analysis, Gross Domestic Product [GDPA], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/GDPA
U.S. Bureau of Economic Analysis, Federal Government Current Expenditures [AFEXPND], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/AFEXPND
U.S. Bureau of Economic Analysis, Federal government current tax receipts [W006RC1A027NBEA], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/W006RC1A027NBEA
Board of Governors of the Federal Reserve System (US), Nonfinancial Sectors; Debt Securities and Loans; Liability, Level [BOGZ1FL394104005A], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/BOGZ1FL394104005A
https://bible.knowing-jesus.com/topics/Weights-And-Measures,-Laws