The Patriot Post® · Courting Calamity

By Dr. Jerome Huyler

While the nation anxiously debates how much more money government should be spending to “Build Back Better,” a related question totally eludes detection: how much less money should our elected representatives appropriate for the good of the country? Before the pandemic struck, the federal government’s annual budget came to $4.5 trillion. Then came multiple bouts of financial assistance that would combat COVID’s calamitous impact on American families. A typical family received a cash infusion totaling roughly $4,000 (more with children). What’s wrong with that?

Every penny a government spends must be financed. The more government spends, the more it must raise in revenue to pay for that spending. Sky-high taxes place heavy burdens on the backs of everyone (except the super rich). They deplete a middle-class family’s disposable income and the overall transactions on which a flourishing economy depends. Confiscatory tax levels are really a well-worn form of political oppression. It’s been so since the beginning of time.

Any family that is paying upwards of 50% in combined federal/state/local income taxes, payroll taxes, property taxes, utility taxes, sales taxes, and capital gains taxes is already half-slave/half-free. Two-income families are unavoidable, since one income is consumed in taxes. Do you know that in the 1st and 2nd centuries, a Roman citizen had to work two days a year to pay his taxes? Two days a year.

But governments don’t dare tax the public sufficiently to pay for their massive spending initiatives. The rest has to be borrowed. Every 12 months, the federal government’s debt is rising by $1+ trillion. In all, the nation now owes in excess of $28 trillion, an amount that is rapidly rising.

Call it the New Slavery. It places future generations in bondage to the profligate spending and borrowing that current congressmen and senators casually undertake.

And it’s not just taxing and borrowing that poses a grave threat to the nation’s well-being. Sooner or later, governments have to pump money into the financial system to prop up a tax-drained, heavily-regulated economy and allow the Treasury to finance the high cost of government. The Federal Reserve has been purchasing $80 billion in Treasury bonds every month. To sustain the illusion of genuine economic growth, the Fed keeps interest rates at zero, adding hot fuel to the fires of stock speculation and mortgage/auto lending. The Fed than returns to the financial markets to purchase another $40 billion in mortgage-backed securities each month. This $120 billion monthly purchase have been cut by a paltry $15 billion in recent days.

This is hardly the first time the country fueled a “fake” prosperity through short-range, expansive fiscal and monetary policies. It can work, until the profligate spending sparks the inevitable inflationary spiral or the distorted pace and direction of capital investment are finally exposed.

At some point, the Federal Reserve will have to combat rising inflation by raising interest rates and tightening the money supply. It is at such moments that the prosperous times come to a screeching stop. Prosperity, itself, is then repossessed. Loan defaults and mortgage foreclosures proliferate and hardship spreads across a troubled land.

That is the calamity this country is courting. Is it already too late to escape this worrisome fate? For the moment, no one can say. But the need to pressure Congress to reduce current spending levels could not be greater. And never forget, cutting public spending means cutting specific spending programs and closing specific federal departments and agencies. Where is the cutting to start?

How about a national movement to dismantle the Department of Education. It clearly is not doing the nation’s public school students any good. The Commerce, Agriculture, and Labor Departments are little more than clientele agencies offering special benefits, privileges, and immunities for the special industries and interests they individually shamelessly serve.

Yes, everyone has a constitutional right to petition government for a redress of grievances. But clamoring for special privileges that can only be awarded at others’ expense (if just the taxpayers) does not constitute a grievance.

Dismantling these four departments will amount to saving some billions annually. That won’t put a dent in the more than $6 trillion Washington is spending. But it can turn the fiscal world upside down, give the progressives a run for their money, and generate greater savings tomorrow.

Past strategies must be avoided. It would be folly to once more call for “across the board” spending cuts. There are spending areas that are vital to the nation’s security. National defense, law enforcement, and justice functions must not be sacrificed on the altar of frugality. The world and many urban streets are growing far too dangerous for that approach. And the old cry to trim “waste, fraud, and mismanagement” sometime soon has never produced savings of any significance.