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January 2016 Brief: Volume 23, Number 2

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The Government Spending and Debt Crisis Continues

 

by John Hendrickson

 

 

In early November Congress and President Barack Obama came to a compromise over spending, which not only raised the debt ceiling, but also left a door open for additional reckless spending. The federal budget is around $4 trillion and our national debt is over $19 trillion, which does not include the unfunded liabilities for entitlement programs such as Social Security and Medicare and the costs of the Patient Protection and Affordable Care Act. “The number one threat to our country’s future is our debt. The number one threat to our national security is our debt,” stated Senator Rand Paul (R-KY).[1] Under President Barack Obama the national debt has expanded over $7 trillion, but the blame for this problem falls on both Democrats and Republicans.

 

Senator James Lankford (R-OK), who has assumed former Oklahoma Senator Tom Coburn’s role as a watchdog on wasteful spending, has released Federal Fumbles: 100 Ways the Government Dropped the Ball.[2] Federal Fumbles exposes some of the wasteful spending by the federal government along with the harmful excessive regulations. As National Review reported, “Lankford records $900 billion in waste — $100 billion in government programs and $800 billion in regulations.”[3] Both excessive spending and regulations are harmful to both individuals and businesses as explained by Senator Lankford:

 

It is important to remember that while wasteful government spending is harmful, overly burdensome federal regulations are an equal part of the problem facing American families and businesses….While certain regulations are important to keep us safe, the current Administration has churned out new regulations at a pace that exceeds 3,500 per year. To put that into perspective, last year, the President signed 224 bills into law but published 3,554 final rules. This means that for every law passed by Congress, the federal government created 16 new rules.[4]

 

As the national debt escalates so will interest payments on the debt. As a recent report from The Heritage Foundation explains:

 

The CBO [Congressional Budget Office] says that ‘net interest costs are projected to nearly quadruple from $227 billion in 2015 to $827 billion in 2025.’ That $827 billion in interest that the government must pay in 2025 represents 59 percent of the entire amount of discretionary spending projected for the government in 2025. In fact, the government projects that it will spend more to make its interest payments on its debt in 2025 than it will lay out for the nation’s defense that year.[5]

 

Michael D. Tanner, a Senior Fellow at the Cato Institute and author of Going for Broke: Deficits, Debt, and the Entitlement Crisis, wrote that “Politicians from both parties continue to avoid taking serious responsibility” in addressing government spending and the debt.[6] As Tanner stated:

 

Democrats tend to believe that higher taxes, especially on the rich, can solve everything. Republicans are more likely to view spending as a problem, but they rely on cuts to domestic discretionary programs that fall short of what is needed to really deal with the issue.[7]

 

A significant driver of the debt crisis is not only out-of-control government spending, but also the escalating cost of entitlement programs. “Social Security, Medicare, and Medicaid alone account for 47 percent of federal spending today…,” noted Tanner.[8] With the national debt over $19 trillion the situation is much worse, as Tanner explains:

 

Our national debt numbers do not include the unfunded future liabilities for entitlement programs…Even under the most optimistic projections, those liabilities, the difference between projected benefits and revenue, total more than $72.5 trillion. Other projections suggest that they could run more than $130 trillion. Thus, our true national debt is actually somewhere between $90.5 trillion and $130 trillion.[9]

 

This is why Senator Rand Paul is correct to point out the fact that the national debt and government spending is the most serious issue confronting the nation. President Calvin Coolidge, who understood that government spending was a moral issue, offered a warning that is relevant to us today when he stated:

 

One of the chief dangers to the success of popular government is that it will throw away self-restraint and self-control and adopt laws, which being without sound economic foundation, bring on such a financial distress as to result in want, misery, disorder, and the dissolution of society.[10]

 

Endnotes:

[1] Senator Rand Paul, “Sen. Rand Paul’s Late Night Filibuster Nearly Derails Debt Increase,” News/Press Release, Office of United States Senator Rand Paul of Kentucky, Washington, D.C., <http://www.paul.senate.gov/news/press/sen-rand-pauls-late-night-filibuster-nearly-derails-debt-increase> accessed on December 2, 2015.
[2] Senator James Lankford, Federal Fumbles: 100 Ways the Government Dropped the Ball, Office of Senator James Lankford of Oklahoma, Washington, D.C., <http://www.lankford.senate.gov/imo/media/doc/Federal_Fumbles_2015.pdf> accessed on December 2, 2015.
[3] Joel Gehrke, “GOP Senator: U.S. Debt could be paid off in 460 years,” National Review Online, December 1, 2015, <http://www.nationalreview.com/article/427788/james-lankford-government-waste-report> accessed on December 2, 2015.
[4] Lankford, p. 3.
[5] Paul Winfree, Romina Boccia, Curtis S. Dubay, and Michael Sargent, “Blueprint for Congressional Fiscal Action in the Remainder of 2015,” Backgrounder, No. 3052, September 2, 2015, The Heritage Foundation, Washington, D.C., <http://www.heritage.org/research/reports/2015/09/blueprint-for-congressional-fiscal-action-in-the-remainder-of-2015> accessed on December 2, 2015.
[6] Michael D. Tanner, Going for Broke: Deficits, Debt, and the Entitlement Crisis, Cato Institute, Washington, D.C., 2015, p. vii.
[7] Ibid.
[8] Ibid.
[9] Ibid., p. 169.
[10] Calvin Coolidge, “Address at the Tenth Regular Meeting of the Business Organization of Government, Memorial Continental Hall, January 30, 1926,” in Foundations of the Republic, University Press of the Pacific, Honolulu, Hawaii, 2004, p. 362.

 

John Hendrickson is a Research Analyst with Public Interest Institute, Mount Pleasant, Iowa.Contact him at Public.Interest.Institute@LimitedGovernment.org.

 

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