January 24 2011
Policy Focus: Government Over-Spending
Carrie L. Lukas
Government over-spending and our massive national debt aren't just problems we will leave to our children and grandchildren. They are hurting our economy today.
The government borrowed more than $1.3 trillion in 2010 and expects to borrow at least another trillion in 2011.
There are consequences to so much borrowing. Trusted credit rating agencies are considering downgrading the United States debt rating, which means lenders will start demanding higher interest rates. More tax dollars will go to pay interest on our debt. Those higher interest rates could make loans more expensive for all of us.
High government spending also means more government control over the economy. Currently, the federal government decides how nearly one-quarter of our Gross National Product (GDP) is spent. Do you think that government uses this money as wisely as families and private companies would? Of course not! Government often makes spending decisions based on political calculations, rather than where the money would be used best.
Money borrowed and spent by government isn't available for entrepreneurs and businesses to start up, expand, and hire more workers. As a result, we have fewer private sector jobs and slower economic growth than we would if government controlled less of our economy. High government spending also paves the way for other bad economic policies. Washington politicians try to justify new taxes and higher tax rates as necessary to close the deficit. The public shouldn't accept those arguments. Washington doesn't have a revenue problem. Taxes aren't too low. The problem is Washington politicians spend too much!
It doesn't have to be this way! Sensible budget cuts can and should be made today to reduce our deficit and debt, and return government to its proper size.