Between servicing the debt and funding entitlement programs, our government is overburdened by its financial obligations. In the current negotiations over how we can avoid falling off the fiscal cliff, some Republicans have indicated willingness to give in to the Democrats’ demands that taxes be raised in order to meet these obligations. Unless limits are placed on spending levels, however, increasing government revenue will not solve the problem in the long term. Any increase in revenue must be accompanied by a limit on spending.
The growth in government is reflected in its spending, which has steadily increased as a percentage of the nation’s GDP. Whenever the government increases its spending obligations, the taxpayers are asked to give “just a little bit more.” Over time, this “little bit more” ends up being quite a bit more. Unless we put a limit on how much the government can spend, it will keep spending, and taxpayers will continually be asked to give more.
Placing a cap on government spending as a percentage of GDP would accomplish several important goals. First, it would ensure that the growth of government is directly tied to the growth of the private sector. It makes little sense for government services and spending to grow at a time when the private sector is struggling to find its economic footing. When the government seeks to help the economy by spending taxpayer money, the spending guarantees the growth of government and nothing else. Taking money from some and giving it to others in hopes of spurring economic growth is like taking water from one end of the bathtub and dumping it in the other in an effort to raise the overall water level in the tub.
Second, a spending cap will force the government to revisit its spending priorities. Restricting government spending will force the government to streamline the bureaucracy and cut spending in areas where it doesn’t need to be spending. Cutting government programs is nearly impossible once they have been created. Small fluctuations can be made in an agency’s budget, but the elimination of an entire agency is almost unheard of. For instance, the Rural Utilities Service, which was created in 1935 in order to bring phone service to rural areas, still exists. Likewise, the U.S. Geological Survey, while perhaps necessary in 1879 for the government to map and chart our nation’s land, is probably not needed today, particularly given the growth of private companies who provide maps and satellite imagery.
Finally, every budget needs limits, as there is no shortage of things that money can be spent on. There can always be one more project, one more constituent or one more special interest that an official will try to budget money for. Moreover, there is always room in the budget as the government can borrow and tax as much as it would like. The government needs constraints placed upon its spending because it can’t be trusted to say when enough is enough on its own.
Taxpayers should be assured that the government will not try to raise taxes, or raise the debt, beyond what is sustainable. The only way to do so is by placing a limit on government spending. Without a government spending limit that is tied to the GDP, nothing will stop government growth, and there is no reason to think this time will be the last time government asks taxpayers for “just a little bit more.”
Kyle Scott is an American politics and constitutional law professor at the University of Houston.
By Douglas Holtz-Eakin
The young drop coverage to avoid higher premiums