Hey, Republicans

Spending is the problem

By Mark Luedtke

I’m sick of hearing about the Republican tax cuts. Granted, cutting the business rate from 35 percent to 21 percent is good. Lower taxes are always better. Competition will force companies to lower their prices. Some companies, which fled overseas to avoid high US taxes, will return, creating more demand for jobs, which means salaries will increase. Because of lower prices, companies will export more products, creating even more jobs. This will improve our standard of living.

But, by definition, revenue neutral tax reform doesn’t cut taxes. It just shifts the burden from one place to another. Other aspects of the supposed reform will offset the gains mentioned above. Mainly, the reform will benefit Republican special interests at the expense of Democrat special interests. Big deal. For most people, it will change little. It tinkers around the edges.

The greatest damage government does to our economy is by spending. US GDP is around $19 trillion, but the federal budget is over $4 trillion. That means only $15 trillion of goods are available. The federal government consumes over 20 percent of GDP, reducing our standard of living by that amount. We have 20 percent less steel, concrete, lumber, houses, cars, food, consumer goods, etc. to benefit us because the government consumes those products.

And with that 20 percent, government produces nothing. Well, less than nothing. It produces war, crime, surveillance, conflict, division, regulations, and miseducation, destroying even more wealth, but it’s hard to quantify the rest. And that’s just the federal government.

I remember when Republicans paid lip service to cut spending, even though the liars have never done it. Not since Eisenhower was president.

The Washington Post informs, “Cutting spending to balance the budget was almost religion to the Republican Party for much of the past eight years. But all year long, despite their control of the White House and Congress, Republicans have not taken steps to balance the budget, to overhaul entitlement programs such as Medicare and Medicaid, or to arrest the growth of the country’s $20 trillion in debt.”

Rulers know the gravy train is about to end. Their focus is to steal as much money as possible for themselves and their cronies before the coming crash wipes the economy out.

Even though official federal debt tops
$20 trillion—counting entitlements it’s over $200 trillion—spending cuts are not politically possible. Rand Paul was the only Republican senator to vote against the $4 trillion budget. Only 20 House Republicans voted against it. Only five Republican senators voted to cut $43 billion from the budget.

Outrageous federal spending is not sustainable, and therefore it will end, but it won’t end rationally. It will be forced on the feds by the coming crash, maximizing pain for the American people.

Spending is not just a federal problem. People are fleeing the basket case rulers created in Illinois. Once again, the problem is spending, not taxes. IllinoisPolicy.org explains, “State per capita tax revenues have grown 70 percent more than inflation over the last 33 years. As a result, Illinois collected $265 billion more than it would have if per capita tax revenues had only grown at the rate of inflation since 1983.”

Rulers get rich on government spending at the state level, much like at the federal level. This is also true at the local level. The Dayton Daily News reports, “Dayton continues to face long-term, structural budget challenges that likely will require intervention or reforms, even though city voters approved an income tax increase last year. The growth in the city’s spending continues to outpace the growth in its revenue, which is unsustainable in the long run, the city’s financial officials said.”

That’s a bald admission of failure.

State and local governments consume around
$3 trillion more, further reducing our standard of living. Governments at every level are marching toward bankruptcy, but instead of fixing the spending problem, rulers milk it. We pay the price.

Ironically, when the impending crash happens, Democrats will blame the Republican tax cuts. They’ll probably get away with it too.

Time is nearly up. The US bond market is on the verge of inverting, which historically signals a crash. Savvy investors don’t trust the future, because they understand what “unsustainable” means. The Chinese bond market inverted for the first time in history this summer. Greece is still the canary in the collapsing EU coal mine.

When the defaults start, they’ll fan across the globe like falling dominoes. Rulers are running out of other people’s money.

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Reach DCP freelance writer Mark Luedtke at MarkLuedtke@DaytonCityPaper.com.

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