By: Josh Colver
As I am writing this, our national debt is just under 20 trillion dollars. To give you a visual, 1 trillion dollars is a stack of one thousand dollar bills 67 miles high. If you multiply that number by 20, you get 1340 miles high! That's the height of some of our satellites. In the most recent fiscal year, we took in 3 trillion in tax revenue, and we spent 4 trillion in our budget. Simple arithmetic tells you this does not add up. Why does this matter you ask? The government takes in money in two ways. The first, yearly taxes. The second is by increasing the money supply to pay off interest on the debt or to finance what we couldn’t afford in our budget. Both of these have adverse effects on the economy. Every penny government taxes from the citizens is money that they were going to spend or save in the market. That money would have created a profit for the business, and in turn, create a job. But when the government takes your money and spends it on something else, that wealth is destroyed and harms the economy. The government can’t create productivity; the only way government creates jobs is if it takes a job that would be created in the private sector. The jobs that the government creates are artificial because the jobs that they are doing are not productive. In a free market, the only work that occurs is work that is done for someone else and where they both agreed on compensation. But in the case of government jobs, there is no one who is paying them to do this job, except for the taxpayer who is robbed to accomplish this. I think journalist Stephen Moore said it best when recalling a dinner he had with economist Milton Friedman: “At one of our dinners, Milton recalled traveling to an Asian country in the 1960s and visiting a worksite where a new canal was being built. He was shocked to see that, instead of modern tractors and earth movers, the workers had shovels. He asked why there were so few machines. The government bureaucrat explained: “You don’t understand. This is a jobs program.” To which Milton replied: “Oh, I thought you were trying to build a canal. If it’s jobs you want, then you should give these workers spoons, not shovels.”
There are only two ways that the budget can be balanced. The first way is by raising taxes. When you raise taxes on corporations they no longer want to or can afford to, do business in the United States. So this tax increase incentivizes people to move jobs overseas and leave America. The second way is by cutting spending. Our politicians today have a tough time cutting spending because it's easier to run and get elected as Santa Claus. If a politician runs for office, it's simpler to promise people free stuff or benefits. Democrats run on the platform of increasing funding for failed social programs, and some even call for free healthcare which is estimated by the New York Times to cost 14 trillion dollars! Republicans aren’t any better. They run on the platform of “rebuilding the military” and “securing the borders” which cost us billions of dollars that we can’t afford. This is how things get done in Washington D.C. The two parties come together to spend the money, the Democrats come to the Republicans and say “hey if you give us the welfare spending we’ll give you the military spending.” This usually is how it goes, and that’s why we have the 20 trillion-dollar debt. If we want to balance the budget, we need to come together to do the opposite. We need to cut money from overseas that we spend on these wars, and we need to reform our entitlement programs to get rid of waste, fraud, and abuse. If we work together to cut spending and balance the budget our country will be a lot more prosperous.