With much sound and fury, the government shutdown (and interruption in the supply of government cheese) has been averted with a “historic” deal to cut $38.5 billion from anticipated government spending this fiscal year.
But, folks, this is a sideshow. This “historic” cut is only about 1 percent of the roughly $3.82 trillion set to be spent this fiscal year (there is no actual budget for this year), and more than 0.27 percent of the national debt, which is almost $14.3 trillion. This is little more than a drop in the ocean.
The president’s proposed budget for fiscal year 2012 is equally discouraging. It would double the publicly held portion of the national debt by the end of the president’s first term and triple it by 2021. It would also impose $1.5 trillion in new taxes and keep federal spending above 23 percent of gross domestic product indefinitely. This is unsustainable and a failure in leadership. It only ignores the elephant in the room.
These budget maneuvers (and the drama associated with them) highlight a misunderstanding by what seems to be a large majority of Washington politicians from all parties. Despite the Washington politicians’ exaggerated view of their own importance, wealth, prosperity and innovation do not spread across the country from Washington. Quite the opposite is the case. Wealth, innovation and prosperity spring from those of us outside the government, including (and really especially) those of us out here in flyover country. Washington politicians, take heed, your first job is not to kill private innovation and wealth creation. It is what makes America great, and it is the only thing that will pull us out of the mess that you have created.
Right now, the economy is largely stalled (despite the allegations of a recovery) because of uncertainty and fear. For the most, part this is a direct result of excessive influence over the economy by the federal government and the unpredictable nature of government policy. Why would an entrepreneur invest in a new venture when employee cost (mostly because of health care) is uncertain, availability of bank lending is uncertain and Federal Reserve monetary policies are uncertain? This is Exhibit A in making the case that the government is incompetent to run the economy. More government intervention (and just more government, period) only will result in more of the same.
You do not have to take my word for the virtues of limited government; just look out your window or check your bank account.
There is hope. Somewhat lost in the news this week is the announcement of a budget proposal by House Budget Committee Chairman Paul Ryan. While all the details are not yet filled in, it would reduce spending by $6.2 trillion throughout 10 years compared with the president’s budget. It would reform welfare, social security, Medicare and Medicaid. It would reform the tax code, setting the maximum income tax rate at 25 percent while eliminating a horde of deductions and loopholes. In short, the Ryan budget would force a reduction in the size of the federal government. It also would transform Medicaid to a block grant program for the states. If you have ever complained to your state representatives about state spending, you know their first excuse is forced Medicaid spending.
So, just maybe, this proposal will help in restraining the size of state government as well. It also would address the looming unfunded liabilities of Social Security and Medicare that almost all Washington politicians are determined to ignore.
So, Congressman Ryan, thank you. You have teed up the issues that this country desperately needs to understand and debate. Let’s hope that you and your colleagues can stay strong and force a reasoned debate about these issues. Let’s hope you can expose the hypocrisy and illogic of those who insist that bigger government is the solution to all problems. Congressman Ryan, let’s hope that, with the help of those of us in the private sector, you and your colleagues can save America’s freedom.
Rick Akin is an attorney practicing in Steamboat Springs, Denver and Austin, Texas, a former member of the Steamboat Pilot & Today Editorial Board, and is Vice Chairman of The Steamboat Institute. He holds a Bachelor of Arts in letters from the University of Oklahoma and a doctorate from the University of Texas.