I’m in substantial agreement with the views expressed in this newsletter from First Trust Portfolio, particularly this passage:
Every dollar the government spends must be either taxed or borrowed from the private sector. The bigger the
government, the smaller the private sector. Not only does increased spending mean higher tax rates are expected in the future, but also a smaller private sector as it’s forced to fund a bigger government. It’s the Spending that crowds out growth, not deficits themselves.
Look, we get it. The world is a dangerous place and we are sure there are parts of our military that need better funding. But the government can’t do everything. If we need more spending on defense, those funds should be found by reducing spending elsewhere. Otherwise, eventually, the country won’t be able to afford to defend itself, either.
But, in order to reach the minimum of 60 votes needed in the US Senate, Republicans capitulated to Democrats demands for more non-military spending. The result was a budget blowout.
That’s not 100% true. The federal government as a monetary sovereign could simply issue credit to itself, “print money”. That has risks of its own and wouldn’t negate the point that choices need to be made.
I’m also skeptical that absolutely everything our military is presently doing is positively required for the country’s security. Some is being mandated by Congress but some of the necessary cuts could and should come from within defense. The military needs to be a better steward.
Making tough choices is not only the role of Congress, it’s the only role of Congress. We do not need a Congress that is too stupid or too cowardly to do its job which, after padding its portfolio for 40 years, retires to lobbying its former colleagues. Endlessly increasing the budget can be done with a computer program. A computer program would do a better job—it wouldn’t be self-serving.