I’m old enough to remember that there used to be quite a few Republicans and even some sober Democrats who said that the federal government needed to live within its means. Apropos of the Vietnam war, they told LBJ that we couldn’t afford both guns and butter.
Sadly, voices of fiscal sanity have become rare among Republicans, and they have completely vanished among Democrats. In Washington, the theory seems to be that the government can spend as much as politicians want without any adverse effects. To be against “stimulus” spending is to declare yourself a cold-hearted enemy of the public welfare.
But the truth is that wild federal spending, with Biden’s new $1.9 trillion package being Exhibit A for the prosecution, does have adverse effects. In this Liberty Unyielding post, Hans Bader points to some of them.
Bader writes, “Any additional stimulus spending is likely to do far more to increase the national debt, promote dependency on the government, and increase inflation in the future, than it is to help Americans who need help. A growing national debt menaces the economy, because more interest has to be paid on the rising debt. That drives up the cost of government, resulting in increased taxes, increased budget deficits, or both. Increases in either taxes or deficit spending crowd out private investment, as the government borrows money that would otherwise be used in the private sector, to do useful things like build factories or otherwise invest in the economy.”
The crucial challenge to those of us who care about the future of the country is to get through to everyone who will listen that the government has no money or resources of its own. Its vast spending comes at an equally vast opportunity cost. Moreover, it has nasty side effects, especially the way it leads to dependency on government. All of this spending is like booze or drugs: they make you feel good for a little while, but they distort your body and your perceptions, making you worse off in the long run.
The U.S. is becoming an addict.