Reading and writing about stuff like this always bums me out, but I think it’s important for Americans to realize how much of a burden our government has become. According to an Americans for Tax Reform report, in 2012 the average American worker will labor for more than six months of the year just to pay for the burden of government. In other words, as of this writing, you’ve already worked more than six months of the year and are just now starting to earn money for yourself. Folks, this is heartbreaking!
The following is a breakdown from the report, which can be downloaded here. In 2012, you will work:
- 88 days to pay for your share of federal spending
- 40 days to fund state and local spending
- 69 days to cover the cost of government regulations
The total is 197 days – more than six months – worked just to support the tax and regulatory burden of federal, state, and local government.
Folks, I don’t know about you, but I’d rather be working more of the year to support my family, not government. Yes, we do need at least some government to keep order in our society and create an environment where people and businesses can thrive – I have no issue with that. However, there comes a point when government becomes a burden too big for the economy to bear.
Government Is Like a Backpack
I think the best way to illustrate how government relates to the private sector economically is to think of it as a backpack full of rocks being carried by a hiker. Remember, government doesn’t generate its own revenue, it’s funded only by money taken from businesses, individuals, and families. If the backpack has only a few rocks in it, the economy can easily support it and remain vibrant and nimble.
However, as government’s tax and regulatory burden grows, it’s like throwing more rocks into the backpack. Eventually, it becomes so heavy that the hiker collapses under its weight.
Another great illustration of how government overburdens the economy came to me in a news article I read a few years ago about a family upside down in their home. I don’t remember all the details, but the value of the house had fallen by half or more and they were enormously burdened by a big mortgage payment. Eventually, keeping up with the bills became too much to bear and they just stopped paying their mortgage and waited for the bank to foreclose. Because they had so much additional cash to play with every month, they were able to go out to eat, take vacations, go to Disneyland, etc.
Whether or not it is right or wrong to stop making your mortgage payments is not the point here, the key thing I want to point out is what happens when a massive financial burden is removed or reduced significantly. What if the financial burden of government on the economy was reduced significantly? How do you think the economy would respond? What do you think would happen if next month the government reduced its burden on the economy by a few hundred billion? Do you think that might stimulate some investment and spending that would help grow the economy?
Washington politicians constantly propose new spending proposals designed to “stimulate” the economy. If injecting money into the economy is the answer, wouldn’t simply reducing the burden of government and letting people and businesses keep more of their money be a better answer? Don’t people in the private sector know better than government how to put their money to productive use?
Time to Cut Back Spending
Folks, with massive deficits at the federal, state, and local levels, it’s time the government cut back spending. If the average worker is already working six months out of the year to just support the government, the answer is not to increase that to eight or nine months. The answer is to cut back the size of government, bring budgets into balance, and allow people to keep more of their money and grow the economy.
Yes, cutting back spending will negatively impact the economy in the short-term. However, it will benefit the economy long-term by reducing the financial burden of government and freeing up capital that can be used for new spending, investing, and job creation.
Any way it goes, spending will have to be cut at some point. The federal government can’t run trillion dollar deficits indefinitely; eventually the laws of economics will assert themselves. We’re far better making the tough choices at a time of our own choosing instead of waiting for the market to force our hand with the threat of national bankruptcy and the accompanying high interest rates, price inflation, and severe economic contraction.
Not sure government really is too big? The CDC apparently has enough cash and time to publish the “Wedding Day Survival Guide”, which tells you how to be prepared in case a disaster strikes on your wedding day.