Years of reckless spending by Congress jeopardizes our nation’s future. At the beginning of March 2015, the national debt totaled an astronomical $18.14 trillion. It’s expected to reach $20 trillion before 2018. The Congressional Budget Office projects this fiscal year’s federal budget deficit at $483 billion, which will be less than the trillion plus annual deficits earlier in the Obama era, but far higher than any other U.S. deficit before FY 2009.
The Obama administration’s recently submitted FY 2016 budget proposes federal spending of $3.99 trillion dollars in the coming fiscal year, one trillion dollars more than in FY 2008, President Bush’s last full year in office.
In the last seven years, the debt has increased by $7.4 trillion, ten times the entire debt incurred in our first 200 years as a nation. Future annual deficits are projected to be nearly $500 billion per year or more far into the future. Common sense informs us this can’t last.
Because the federal government spends far more than it takes in, the government has to borrow massive amounts money to pay its bills. Much of this money is loaned to us by China, Japan, and OPEC nations, among others. But relying on foreign nations to finance our government gives these nations an opportunity to influence American policy in ways that may not be good for our country. All this governmental borrowing also diverts capital from the private sector, eventually resulting in higher interest rates and slower economic growth.
To make matters worse, annual federal deficits will increase dramatically if the interest rate the federal government pays on its debts again approaches historical norms. In early March 2015, the 10 year Treasury rate was 2.12%. The historical average 10 year Treasury rate is around 6.5%.
Current interest rates are low due to Federal Reserve manipulation. The Federal Reserve essentially prints money, which it uses to buy large amounts of U.S. federal debt, artificially holding down interest rates. But when the Federal Reserve prints money, inflation follows. With inflation comes economic instability.
At some point, the threat of inflation will end the Federal Reserve’s debt buying intervention, and interest rates and federal interest payments will increase significantly. Should the nations lending money to the federal government pull back on their loans, as China has threatened to do, the Federal Reserve will print even more money and buy government debt to make up the difference.
It is not only fiscally irresponsible for Congress to hand off this overwhelming debt burden to our children, it is immoral. Republicans as well as Democrats are to blame. Unless spending discipline is instilled now, future generations will be left with a government that can’t meet its obligations.
We can pay down our runaway national debt and stop the reckless Congressional spending that created it, if we return to limited government as our Constitution has always required.
The role of the federal government is limited to the powers delegated to it by the Constitution. The powers granted to Congress are listed in Article 1, Section 8. The states retain general police powers governing health, education, and welfare, pursuant to the Tenth Amendment. Most governmental matters do not fall within the enumerated powers granted the federal government, are not federal issues, and should not come within the purview of Congressional concern and Congressional spending programs. This is true regardless of the expansive but erroneous interpretation of the Constitution’s Commerce Clause in the last several decades.
The first step is to impose a widely targeted freeze on federal spending and keep the freeze in place as revenues grow. Dismantling unneeded federal department and agencies should follow, with real cuts in federal spending, not reductions in inflated future federal baselines. Lowering federal taxes rates will cause the economy to grow and tax revenues to increase, as Americans, enjoying more of their earnings, work and invest more.
Entrenched political interests in Washington and the career politicians that support them will oppose these actions every step of the way. Our country is worth taking on this fight.
Implementing these steps to reduce the size and scope of the federal government will require the type of discipline that does not look to the next election. Tough decisions will have to be made. It will take conservative fighters in the U.S. Congress to make these decisions and stick with them.
There are a number of conservative Congressmen today who are willing to take these steps, but they need help. Help me join the fight to restore limited government and preserve our economic future in the United States House of Representatives.