American Institute for Economic Research AIER
To End Budget Deficits, Restrict Political Pickpockets
Government spending is out of control. In March 2021, the Congressional Budget Office (CBO) projected that federal government spending in fiscal year 2021 (which began on October 1, 2020) will come to at least $5.8 trillion, with tax revenues of $3.5 trillion, and a resulting budget deficit of over $2.3 trillion. The total federal accumulated debt will be approaching $30 trillion.
“Mandatory” government spending – the “entitlement programs” – will come to about $3.7 trillion out of all expenditures of $5.8 trillion, or 66 percent of that total. “Discretionary” spending will be over $1.6 trillion, with interest payments on prior accumulated federal debt being another $303 billion. Notice that the entitlement spending for Uncle Sam’s current fiscal year of $3.7 trillion will be larger than the anticipated total tax revenues of $3.5 trillion from all sources. The core welfare state expenses are costing $200 billion more than all of what is collected from American taxpayers. So, the government is borrowing money to cover part of the entitlement expenditures, plus all “discretionary” spending, and the interest on the national debt.
In this fiscal year, government spending will equal 26.3 percent of U.S. Gross Domestic Product (GDP), with tax revenues coming to 16 percent of GDP, and the budget deficit equaling 10.3 percent of GDP. That is, federal government spending will be more than one out of every four dollars of the total value of national output. And the budget deficit will be more than one out of every 10 dollars of GDP.
(It also should be kept in mind that in 2021 state and local government spending is likely to be an additional $4 trillion, on top of what the federal government is spending.)
This Is a Pandemic of Fiscal Profligacy
Perhaps you’ve heard the story of the guy who – after jumping from the 50th floor of a skyscraper – is asked how he’s doing as he falls past the 20th floor. “So far, so good!” he replies. That blissfully unaware individual headed toward his doom is, my fellow Americans, us. And we’re heading there not because Dr. Seuss Enterprises decided to stop the publication of six books.
It’s because of increasingly extremist policymaking like the Democrats’ $1.9 trillion “American Rescue” plan, which has little to do with rescuing and everything to do with using the pandemic as an excuse to move the country closer to a progressive paradise. While it passed along party lines, the outrage from the Republican and its tabloid media sycophants was rather tame.
The latest $1.9 trillion addition to the federal debt is best described as a left-wing slush fund: extra generous UBI-like child allowances and child-care subsidies, four-figure checks sent to people financially unaffected by the pandemic, more Obamacare subsidies, bailouts for union pensions and airlines, and even more largesse for state and local governments that either don’t need it or don’t deserve it. Meanwhile, much of the GOP remains stuck in Donald Trump’s alternative reality TV show.
John Stuart Mill and the Three Dangers to Liberty
JOHN STUART MILL’S 1859 ESSAY “On Liberty” is one of the most enduring and powerful defenses of individual freedom ever penned. Both advocates and enemies of personal freedom have challenged either the premises or the logic in Mill’s argument. They have pointed out inconsistencies or incompleteness in his reasoning. But the fact remains that after almost 150 years, few essays continue to justify being read and pondered with the same care and attention as “On Liberty.”
Mill defended freedom of thought on several grounds. First, we should accept the fact that none of us can claim an infallibility of knowledge or a final and definite insight into ultimate truth. Thus, we should value and defend liberty of thought and argument because a dissenter or a critic of conventional and generally accepted views may offer reasons for disagreeing that correct our own errors of knowledge and mistakes in judgment about the truth of things.
Second, sometimes the truth about things exists as half-truths held by different people, and through controversy the truth in the parts can be made into a great unified truth of the whole.
And, third, even if we are really certain that we have the truth and a correct understanding of things, unless we are open to challenging and rethinking that which we take for granted, our ideas and beliefs can easily become atrophied dogmas. The people in each generation must be taught to think and reason for themselves. If ideas and beliefs are to remain living and meaningful, people must arrive at their own conclusions through reflection and thought.
Mill not only defended freedom of thought but liberty of action as well. To make men conform to a uniformity in their conduct would prevent that which is an inherent hallmark of each of us as a human being: our individuality. Mill’s point on this theme was once neatly expressed by the libertarian political philosopher and free-market economist Murray Rothbard:
