20 by ’20: A Limit on Federal Spending

By Dennis Canfield.

    “…  It’s time to try something new.” – President Barack Obama, introducing his $3.8 trillion budget for 2011—which proposes that our federal government spend 25 cents of every dollar earned by every American, rich and poor alike.  This is new.  Before World War II, our government typically spent 10% less of GDP; from 1947 to 1975, fifteen to twenty percent of GDP.  Since 1975, it has frequently spent more than 20% percent of GDP. Now our government is spending more than 25% of GDP each year.  

This money goes for things like the Department of Education, which was created in 1979 and which this year will spend about $50 billion.  Like most agencies of the federal government the DOE’s budget continues to grow, though there is scant evidence that this spending has improved education since the department was founded.  Also scattered around the budget are some 2,000 federal subsidy programs, which range from the well known (such as agricultural subsidies), to the obscure (such as subsidies to air carriers that serve rural markets).  And in every department, from Defense to Commerce, there are opportunities for substantial savings.

We will achieve a major victory if we can reduce federal spending to 20% of GDP by September 30, 2020 (the end of the 2020 fiscal year).  Anyone who is genuinely concerned about budget deficits should support the “twenty by ’20” objective, because spending cuts are the only sure way to reduce deficits.  Tax increases may or may not increase revenue, and revenue increases may or may not be used to reduce deficits, but spending cuts always reduce deficits.  This means that we should not allow ourselves to accept tax increases because we are concerned about budget deficits.  We should insist that budget deficits be resolved through spending cuts.

Limiting government spending is an essential part of defending our freedom against those who would use government to undermine our freedom.  So we will always have to be engaged in politics, though it is not our nature to want to be engaged in politics.  We will have to give up time we would rather keep to ourselves, and take up responsibilities we would rather leave to others. We will have to do all this in order to ensure that our government performs its necessary and proper functions without expanding beyond its proper limits. 

We will need to give our legislators every possible encouragement to spend cautiously, and every assurance that we will hold them responsible if they don’t.  Our reward will be measured in greater freedom and prosperity for all Americans.

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