This column by ACRU Policy Board Member and Professor of Economics Walter E. Williams was published January 26, 2011 on Townhall.com.
National debt is over $14 trillion, the federal budget deficit is $1.4 trillion and, depending on whose estimates are used, the unfunded liability or indebtedness of the federal government (mostly in the form of obligations for Social Security, Medicare, Medicaid and prescription drugs) is estimated to be between $60 and $100 trillion.
Those entitlements along with others account for nearly 60 percent of federal spending. They are what Congress calls mandatory or non-discretionary spending. Then there’s discretionary spending, half of which is for national defense. Each year, non-discretionary spending consumes a higher and higher percent of the federal budget.
The spending path that Congress has chosen for the last half-century is unsustainable and will end up with economic collapse but little or nothing can be done about it unless I’m grossly wrong about the American people. Americans who detest our country and those who love our country are hell-bent, wittingly or unwittingly, on destroying it.
You say, “Williams, that’s not only insulting but shows little trust as well. Explain yourself!”
For the past 30 years, federal tax revenues have averaged 18 percent of the GDP. Federal spending, nearing 30 percent of our GDP, is the problem. To get our economic house in order, there must be large spending cuts, not only in so-called discretionary spending but in non-discretionary spending as well.
To put this in perspective: Defense spending is called discretionary and totals $685 billion. Our deficit is $1.4 trillion. Defense spending could be entirely eliminated and we’d still have a massive deficit. Any congressman unwilling to make cuts in entitlement spending is not to be taken seriously about sparing our nation from economic collapse.
Millions of Americans don’t want their entitlement touched, many of whom are senior citizens. Seniors will tell you that they were forced into Social Security and Medicare, and any congressman talking about cutting those and other entitlements will face their wrath at the ballot box. By the way, according to one study, “Until recent years, Social Security recipients received more, often far more, than the value of the Social Security taxes they paid. For workers who earned average wages and retired in 1980 at age 65, it took 2.8 years to recover the value of the retirement portion of the combined employee and employer shares of their Social Security taxes plus interest.”
Seniors are not the only group who can put the fear of God into politicians. There are massive corporate handouts through programs like the Export-Import Bank, Agriculture Department business and farm subsidies, and the Small Business Administration. Then there’s massive Department of Education spending on K-12 education and higher education. The list of federal programs, described as taking the earnings of one American and giving them to another, numbers in the thousands.
Everyone who receives government largesse and special favors deems his needs as vital, deserving, proper and in the national interest. It is entirely unreasonable to expect a politician to honor and obey our Constitution and in the process commit political suicide. What’s even worse for our nation is that voters ousting a politician who’d refuse to bring, say, aid to higher education back to his constituents is perfectly rational. If, for example, he’s a Virginia politician and doesn’t bring higher education grants back to his constituents, it doesn’t mean Virginian taxpayers will pay a lower income tax. All that it means is that Marylanders will get the money instead. Once legalized theft begins, it pays for everyone to participate. Those who don’t will be losers.
That’s the nation’s dilemma. The most important job for people who want to spare our nation from economic collapse is not that of persuading politicians to do the right thing but to convince our fellow Americans to respect the limits of our Constitution. In his speech to Virginia’s ratifying convention, James Madison said, “Liberty lies in the hearts of men and women; when it dies there, no constitution, no law, no court can save it; no constitution, no law, no court can even do much to help it.”