May I juxtapose two e-mails I received today? More…
Who are their rioters? Tens of thousands of civil servants. They turned violent in the face of cuts that will affect their pocket books. These government workers live well. After 35 years of government service, they can retire at 80 percent of their highest salary. They enjoy Cadillac health plans, vacations, and other perks that their private sector counterparts, who foot the bill, don’t.
Greece was forced to make cuts in order to receive a bailout from the International Monetary Fund. Greek was on the verge economic collapse as their government debt had climbed to 150 percent of its GDP.
Greek rioters are upset that their gravy train is coming to an end. Can you blame them?
In the U.S., protests have broken out in the past year or so over profligate government spending.
Who are the protesters? Regular folks. Business owners. Housewives. Veterans. They gather peacefully in cities across the country in a movement known as the “Tea Party Protests.”
Unlike the violent protesters in Greece who don’t care about their government’s debt, the Tea Party protesters care very much. They look at how it has climbed since President Reagan left office. In 1989, U.S. federal debt was about 52 percent of GDP. By the end of next year, President Obama’s cumulative budget deficit will rise to an estimated level of 94 percent of GDP and climbing.
The Tea Party movement is worried about how the government spends their money. When the recession hit, private employers shed jobs to stay afloat while state and local governments hired 110,000 new workers.
Under Obama’s budget, the federal government will increase the size of the federal workforce by 14.5 percent.
More than half of union members in the U.S. are now public employees. They are well paid. Federal employees earn about double what their private sector counterparts earn when you factor in salaries and benefits.
This is a serious gap between public and private employees in light of the fact that private employees are footing most of the bills. We have some great employees working for us at the local, state, and federal levels. But something’s wrong when private workers are losing jobs and wages and public ones aren’t.
Something’s wrong when federal employees make so much more than the working class families who pay their salaries.
Something’s wrong when public employee unions donate lavishly to one political party, the one that keeps the perks and jobs flowing for these unions, while the rest of America sacrifices and suffers.
If only Greece had their own Tea Party Movement five or ten years ago, who knows, maybe things would have turned out differently for them.
In America, the Tea Party Movement may be the only thing that saves us from a federal debt that hits 150 percent of GDP.
Who can blame the Tea Party movement for their conscientious support of fiscal sanity? They deserve our support.
“I am confident we can get government off our backs and out of our pockets …” Ronald Reagan, November 3, 1980
“Read my lips, no new taxes.” George H. W. Bush, August 18, 1988
“The era of big government is over.” William Jefferson Clinton, January 27, 1996
“We must balance the federal budget.” George W. Bush, January 23, 2007
“That’s why today I’m pledging to cut the deficit we inherited by half by the end of my first term in office.” Barack Obama, February 23, 2009
Three Republican Presidents and two Democrats have been united in their rhetoric: we must be concerned about excessive deficits, taxation, and government spending. Each pledged to do something about it in their own way.
Collectively they have failed us. Spending is out of control.
Joe Sixpack is struggling to pay his mortgage, to put some food on the table, and to try to put a few bucks away to help his kids go to college. A hundred bucks is a lot of money in these economic times. So talk of government debt in the trillions of dollars is enough to make our beer go flat.
I have developed a simple way to relate to the way the national government spends our money. I call it Federal Spending for Dummies. I simply take the total dollars the federal government spends (official White House numbers) and divide it by the population (according to the U.S. Census Bureau). I compare the amount the government spends per person by decade and adjust for inflation.
I did something similar two weeks ago looking at state spending. Here are the raw, unadjusted numbers:
In 1980, the Federal Government spent an average of $2498 per citizen.
In 1990, the Federal Government spent an average of $4943 per citizen.
In 2000, the Federal Government spent an average of $6138 per citizen.
In 2010, the Federal Government will spend an average of $11,640 per citizen (estimated).
If we adjust for inflation using 1980 dollars, Federal spending has climbed from $2498 per person in 1980 to $4470 today. In the last decade alone, spending has climbed $1533 per citizen in inflation-adjusted 1980 dollars.
Democrats and Republicans have collaborated in this dramatic expansion of government spending. In fact, the most frugal period was the decade of gridlock when President Clinton, a Democrat, and Speaker Gingrich, a Republican, helped keep the other party’s spending habits in check.
And yet, even with the modest restraint of the 90’s, federal spending has increased more than twice the rate of inflation since 1992.
We have a spending problem, not a tax problem.
The national debt is near $12 trillion, about 61 percent of gross domestic product (GDP). By contrast, China’s national debt is only 16.2 percent of their GDP.
The Government Accountability Office (GAO), the auditor for the federal government lays it on the line to us: the U.S. is on a fiscally “unsustainable path.
Has spending skyrocketed because of the war on terror? No. As a percentage of GDP we spend less today on defense than we did during the Reagan years.
On the other hand, pork barrel spending is out of control. According to Citizens Against Government Waste, earmarks have increased from 13, 443 from 1991 through 1999 to over 20,000 in the past two years alone.
The risks of excessive government spending deficits are significant. Either taxes have to be raised so dramatically, that the economy is crippled and jobs destroyed. Or else government spending has to be yanked back abruptly with whiplash repercussions to the country. Or else we have to inflate our way out of the mess, which creates an even worse problem.
As I write this piece, a Republican was just elected to the Senate from the liberal state of Massachusetts. Ted Kennedy’s Senate seat is now in the hands of a Republican.
Is this a ringing endorsement for the Republican Party?
I think not. Rather, it is a ringing endorsement for restraint. It is an indictment of proposed health care legislation. It is a reflection of the electorate’s desire for moderation in government spending.
It’s not too late to change our course. But we need to start now.